Tech stocks drive sharp market decline as weak economic data sparks concerns

The semiconductor industry played a key role in the market’s decline. Nvidia, a prominent player in the sector, fell by over 9 percent. Other companies like Micron, KLA, and Advanced Micro Devices also saw significant drops during the trading session.

As a whole, the Vaneck Semiconductor ETF (SMH) dropped by more than 7 percent. The technology sector within the S&P 500 led the index’s decline, experiencing its worst single-day performance since September 2022.

The market downturn was triggered by weak manufacturing production data.

Two key reports indicated economic weakness: S&P Global reported a decline in production from July to August, and the Institute for Supply Management’s index fell short of economists’ expectations from a Dow Jones survey.

These disappointing reports raised concerns about the slowing growth of the US economy, contributing to Tuesday’s sell-off. Similar concerns led to a significant market decline in early August.