Nvidia shares plummet; tech sector faces historic downturn

Nvidia, a giant in graphics processors and artificial intelligence, recorded a significant drop in stock value. At the same time, attention on the international stage focused on personnel changes in the office of Ukrainian President Volodymyr Zelensky.

On Tuesday, Nvidia's shares experienced a sharp decline, marking the largest single-day drop in market value in American companies' history.

The PHLX (Philadelphia Stock Exchange) index, which tracks semiconductor sector quotations, fell 7.75 percent. This is the largest single-day drop for this index since 2024. The current fluctuations in the AI market follow Nvidia's recent quarterly forecast, which fell short of investors' high expectations.

Todd Sohn, an ETF strategist at Strategas Securities, explained the reasons for the strong sell-off. Over the past 12 months, massive funds have been invested in the technology and semiconductor sector, leading to significant market imbalance, as he said. Concerns about the slow return on high AI investments also affect other tech giants.

Intel recorded a drop of nearly 9 percent following reports from Reuters about the company's restructuring plans. According to these reports, CEO Pat Gelsinger and key managers plan to present the board with a plan to eliminate unnecessary business areas and change the struggling chip manufacturer's investment strategy.

Weakness in the chip sector coincided with broad declines on Wall Street. The Nasdaq index fell 3.3 percent, and the S&P 500 2.1 percent. According to the CME FedWatch tool, most investors expect the Federal Reserve to cut interest rates by 0.25 percentage points at the meeting on September 18.

However, expectations for a 0.50-point cut rose to 37 percent from 30 percent after data indicated continued weakness in the manufacturing sector. This week, investors will receive a range of labor market data, with the critical government employment report due on Friday.