US stocks had their worst day in a month yesterday, as investors sold chipmakers and falling crude prices dragged energy groups down. Nvidia led the sell-off, as weak data on the state of the manufacturing sector added to concerns of an economic slowdown. The Philadelphia Semiconductor index fell 7.8%, its worst one-day loss since the start of the Covid-19 pandemic. Nvidia fell 9.5%, its biggest daily fall since April. Intel plunged 8.8%, Micron lost 8%, and AMD fell 7.8%. US manufacturing activity shrank for the fifth consecutive month, while focus will now turn to the employment data due on Friday where it is expected 165k jobs were added to the world's largest economy.
Asian equities, in particular chipmakers have also suffered significant losses, South Korea’s Kospi dropped 3.1%, with memory chipmaker SK Hynix falling over 9% and Samsung Electronics, the largest constituent, falling almost 3%, though since recovered. Both companies manufacture the high-bandwidth memory chips used in artificial intelligence applications. The Topix shed 3.7%, with Tokyo Electron, a chipmaker, and Disco Corporation, which makes semiconductor manufacturing equipment, both making significant losses.
Brent crude fell to its lowest level since December yesterday, settling down 4.9% for its worst day since May. This is driven by fears that Libya, which shut down around 60% of its 1.2mn barrels a day of oil last week, may soon restore full output. This, combined with concerns over weak demand from China, has compounded fears that weak global demand will create an oversupply on the market. The benchmark fell as much as 5% to $73.67, which is also the first time it has slipped below $75 since January. WTI fell to $70.25.
Australian GDP data was released this morning, the economy slowed in the second quarter due to meagre consumer spending and a decline in export revenue as the price of iron ore and coal has fallen. The Australian Dollar held on to losses.
Data wise today we have Eurozone HCOB PMI and PPI later this morning, a Canada rate decision at 2:45pm and US job openings at 3pm.
