Nvidia slumps to weigh down Wall Street, ASX set to fall

The US stock market is slumping as Nvidia and other superstars swept up in the mania around artificial-intelligence technology keep weakening.

The S&P 500 fell 1.3 per cent in afternoon trading and pulled further from its all-time high set late last month. The Dow Jones lost 471 points, or 1 per cent, from its own record set the day before, while the Nasdaq composite was down 2 per cent, in early afternoon trade.

The Australian sharemarket is set to fall, with futures at 4.54am AEDT pointing to a loss of 108 points, or 1.2 per cent, at the open. The ASX fell 0.5 per cent on Thursday

Nvidia was the heaviest weight on the market after the chip company lost 4.1 per cent. Other AI darlings also struggled, including drops of 6.4 per cent for Super Micro Computer, 5.1 per cent for Palantir Technologies and 4.9 per cent for Broadcom.

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Questions have been rising about how much more superstar AI stocks can add to their already spectacular gains. At the start of this month, Palantir was sporting a stunning rise of nearly 174 per cent for the year so far, for example.

Such sensational performances have been one of the top reasons the US market has hit records despite a slowing job market and high inflation. AI stock prices have shot so high, though, that they’re also drawing comparisons to the 2000 dot-com bubble which ultimately burst and dragged the S&P 500 down by nearly half.

In the meantime, Wall Street is waiting to see if more news coming about the economy’s health will be good news or bad.

The US government is reopening following a six-week shutdown, its longest in history. The stock market mostly rose through the shutdown, as it has often done historically, but Wall Street is bracing for potential swings as the government gets back to releasing important updates on the job market and other signals about the economy’s strength.