Nvidia stock (NASDAQ:NVDA) tumbled sharply in premarket trading Monday amid a wider stock market rout caused by concerns that the Federal Reserve may be moving too slowly to prop up a weakening U.S. economy.
The chipmaker’s shares fell roughly 10% in the market pre-open to $96.62.If these losses hold until the market opens, around $260 billion could be wiped from Nvidia’s market cap, which was $2.64 trillion at Friday’s close. This would also be the lowest price level for NVDA since May 2024.
Nasdaq 100 futures lost around 4.4%, just days after the index entered a technical correction on Friday. S&P 500 contracts fell more than 2.8%, while Europe’s Stoxx 600 benchmark dropped over 2.5%, marking its biggest three-day decline since June 2022.
In Japan, the Topix and Nikkei indexes each declined more than 12%. Taiwan’s benchmark experienced its worst day on record, and a broader measure of Asian shares saw its steepest drop in over four years.
The selloff was driven by Friday’s data indicating a weakening US jobs market, which triggered a key recession indicator. Concerns over high valuations from the AI boom and rising tensions in the Middle East further also contributed to the risk-averse sentiment.
The global equity decline reflects concerns about the economic outlook, geopolitical risks, and skepticism over whether substantial investments in AI will meet the high expectations.
Economists at Goldman Sachs Group Inc. raised the likelihood of a US recession in the next year to 25% from 15%, although they noted there are still reasons not to fear a severe downturn.
Economists at JPMorgan shared even more pessimistic predictions, assigning the odds of an economic downturn at 50%.