Markets slump amid growth worries; Nvidia ‘gets subpoena from US DoJ’ – business live | Business

Britain’s FTSE 100 index has opened in the red, with most stocks falling.

The blue-chip share index is down 51 points, or 0.6%, at 8247 points, which is a three-week low.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, says:

‘’Fresh worries about the health of the global economy have gripped markets, with the FTSE 100 far from immune given the international leaning of the index. London-listed stocks are set for another downbeat session, after deep concerns rippled out from Wall Street over the risks of an American recession.

This is the second time in just over a month that the markets have had a growth wobble.

At the start of August, shares suffered a sharp tumble, before investors recovered their nerve and pushed equities up again.

September (often a rough month for markets) has begun gloomily too.

Kathleen Brooks, research director at XTB, says:

If you have déjà vu, it is no surprise. A month ago, a sell off happened, and it looks like the same thing is happening this month. A mixture of fears about global growth, a commodity market sell off, shifting monetary policy cycles and seasonality, with stock markets typically doing badly in September, has been given a helping hand by the Department of Justice in the US, who has subpoenaed Nvidia as it seeks evidence that the AI giant broke anti-trust laws.

Nvidia, still the top performing stock on the S&P 500 so far this year, toppled nearly 10% on Tuesday, and the semiconductor sector in the US was the second worst performer of the day. There were few safe harbours in the latest financial market storm.

Tech was the most impacted, and the Nasdaq dropped more than 3%. However, even the Dow Jones Industrial Index lost 1.5%, with defensive sectors like healthcare and consumer staples just about managing to eke out a gain.

Chipmaker Nvidia led the selloff yesterday, slumping by 9.5% – that wiped $279 billion off its market capitalization, the largest one-day drop in history for a US company.

This selloff suggested that the boom in AI stocks was fading.

But after the Wall Street market closed, news broke that the US Department of Justice has sent a subpoena to Nvidia, as its investigation into the company deepened.

According to Bloomberg, the antitrust watchdog had previously delivered questionnaires, and has now sent legally binding requests to Nvidia. Other companies had also received subpoenas, they added.

Nvidia’s processors are currently incredibly popular with tech firms building artificial intelligence systems; DoJ officials are reportedly concerned that the chipmaker is making it harder to switch to other suppliers and penalizes buyers that do not exclusively use its AI chips.

Nvidia, though, denies any wrongdoing. A spokesperson for the company said:

“Nvidia wins on merit, as reflected in our benchmark results and value to customers, who can choose whatever solution is best for them.”

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

Another bout of growth fears is sweeping through the markets, as the spectre of a US downturn spooks investors.

After a rough day on Wall Street yesterday, Asia-Pacific markets are a sea of red today.

Japan’s Nikkei 225 index has lost 4.2% today. South Korea’s Kospi has lost 3.4% so far, and Australia’s S&P/ASX 200 index is 1.9% lower.

Investors across Asia took their lead from New York, where the S&P 500 index fell by over 2% yesterday and the tech-focused Nasdaq Composite shed almost 3.3%.

The trigger (as we blogged yesterday) was a set of weak manufacturing data from the US. The Institute for Supply Management’s monthly factory survey showed that manufacturing contracted at a moderate pace in August, with new orders, production output and employment levels falling.

“Summer’s over, and the bears are back with a bang,” says Michael Brown, senior research strategist at Pepperstone.

European markets, which fell yesterday, are set for further losses, with London’s FTSE 100 expected to drop 0.7%.

The agenda

• 9am BST: Eurozone services PMI for August

• 9.30am BST: UK services PMI for August

• Noon BST: US weekly mortgage applications data

• 1.30pm BST: US trade balance for July

• 2.45pm BST: Bank of Canada sets interest rates

• 3pm BST: JOLTS survey of US job openings

• 3pm BST: US factory orders for July

• 7pm: Federal Reserve publishes its Beige Book summary of economic conditions