All three major indexes on Wall Street recorded their steepest daily declines since August 5. The Dow Jones Industrial Average dropped 1.5% to 40,936.93, the S&P 500 fell 2.1% to 5,528.93, and the Nasdaq Composite slumped 3.3% to 17,136.30. Similarly, MSCI’s global stock index fell 1.63%, marking its biggest one-day drop since August 5.
In the bond market, the yield on US 10-year Treasury notes dipped to 3.85%, down from 3.91% late on Friday.
Asian markets followed suit, experiencing their sharpest declines since the August 5 selloff, driven by a steep drop in Nvidia’s stock. Shares of Asian semiconductor companies fell amid renewed concerns over the artificial intelligence boom, with the regional equity benchmark dropping over 2%. Major chipmakers Taiwan Semiconductor Manufacturing Co. and SK Hynix Inc. each fell more than 4%. Meanwhile, US futures continued to slide during Asian trading after the S&P 500’s over 2% loss.
The broad risk-off sentiment was fueled by a closely watched US manufacturing indicator falling short of expectations, shifting investor attention toward the potential for an economic slowdown in the US. This compounded the negative sentiment in Asia, where a series of disappointing economic data from China had already weighed on risk assets.
Treasury yields stabilized after a sharp decline on Tuesday, while a dollar index ended a five-day winning streak—its longest since April. The yen edged higher, and oil prices fell further following a nearly 5% drop on Tuesday due to weak demand and oversupply concerns.
Elsewhere in Asia, the Australian dollar remained under pressure after data indicated ongoing economic weakness in Australia for the three months ending in June. Chinese stocks also declined after a private survey revealed slower-than-expected growth in services activity, underscoring the fragility of the economy.
