US stocks fell sharply on Tuesday, with the Dow Jones Industrial Average dropping more than 600 points. This is the fifth straight day of losses for the Dow, wiping out almost 2,000 points in total. S&P 500 also declined by 1.2% in its fourth consecutive drop, but the Nasdaq Composite fell 1.7%, showing a bigger impact on technology stocks.
Investors are becoming nervous about high valuations in artificial intelligence (AI) companies and growing uncertainty about the economy. The result has been one of the toughest weeks for US markets in a long time.
As reported by The Economic Times, the decline comes from a mix of worries about interest rates, concerns that some stocks are overpriced, and investors becoming more cautious. These factors together have made it one of the more significant single-day market drops seen recently.
Nvidia, a major AI chip company, added to the tension by falling around 3% before announcing its important earnings report. The company’s stock has gained 42% this year but has fallen more than 10% in the last month. It currently trades at about $183, with a price-to-earnings ratio of roughly 52 and a market value of more than $4.4 trillion, according to the Economic Times.
Uncertainty around AI also contributed to the decline. Investors are beginning to question whether the rapid growth in the AI industry can continue at the same pace. This has created more pressure on tech stocks as everyone waits for Nvidia’s fiscal third-quarter earnings, which will be released after the market closes on November 19.
Wall Street expects Nvidia to report around $54.9 billion in revenue, a 17% jump from the previous quarter, mostly driven by AI chip sales and expanding data-centre demand. Earnings per share are expected to be around $1.25.
The entire market is watching Nvidia closely because its results could influence what happens next on Wall Street. Strong earnings and positive guidance might help lift the market, especially the Nasdaq and S&P 500. But if Nvidia misses expectations or offers a cautious outlook, the recent market slump could deepen.