UPDATE: The U.S. stock market is experiencing a significant downturn today as Nvidia and the cryptocurrency Bitcoin continue to exert downward pressure on major indices. The S&P 500 plunged 0.9% to 6,672.41, while the Dow Jones Industrial Average fell a staggering 557 points, or 1.2%, closing at 46,590.24. The Nasdaq composite also faced losses, sinking 0.8% to 22,708.07.
Nvidia, a key player in the artificial intelligence sector, dropped 1.8% as it remains under scrutiny following weeks of volatility. The company’s performance has been a focal point for investors, particularly ahead of its upcoming earnings report scheduled for Wednesday.
The fallout extends to Bitcoin, which has now fallen below $92,000, down significantly from nearly $125,000 last month. This decline has negatively impacted cryptocurrency exchanges, with Coinbase Global slipping 7.1% and Robinhood Markets dropping 5.3%.
The market’s decline comes amid warnings from analysts that the recent surge in stock prices, particularly those linked to AI, may be unsustainable. Investors are increasingly cautious as they anticipate Nvidia’s earnings report, which could either validate or undermine the high expectations driving the current market.
In a related development, Aramark fell 5.2% after reporting profits below analyst predictions, signaling potential concerns about growth across various sectors. The company, which provides food and facilities management services, projected a profit growth of 20% to 25% for the upcoming year, but this was below expectations.
Amid these challenges, Alphabet shares rose by 3.1% after Berkshire Hathaway, led by the renowned investor Warren Buffett, announced a new stake valued at $4.34 billion in Google’s parent company. This move indicates Buffett’s strategy of investing in stocks perceived as undervalued, despite the overall market decline.
Market analysts are closely monitoring the Federal Reserve’s upcoming decisions regarding interest rates. The anticipation of a delayed interest rate cut, particularly in light of the upcoming jobs report set to release on Thursday, injects further uncertainty into the market. Strong job data could deter the Fed from cutting rates, while weak figures may heighten concerns about economic stability.
According to Barry Bannister, chief equity strategist at Stifel, the current environment suggests the Fed may only respond to economic slowdowns in 2026, a shift that may not bode well for stock prices. Bannister stated that the “Fed’s ‘free lunch’ is over,” indicating a new era of cautious monetary policy.
As the market grapples with these significant developments, investors are urged to stay vigilant and prepared for potential volatility in the coming days. The situation is evolving rapidly, and all eyes will be on Nvidia’s earnings report and the forthcoming jobs data to gauge the future direction of U.S. stocks.
