Markets struggle but limit losses ~ EconomyLens.com

London (AFP) – Stock markets slipped on Wednesday as tech firms fought to limit recent losses while disappointing data on US trade also hit sentiment. Major European markets ended in the red as Wall Street fought to hold the line after sharp falls Tuesday, notably for big tech players.

After early renewed wobbles, chip titan Nvidia, which notably shed almost $280 billion of value Tuesday on fears the surge in artificial intelligence-linked firms may have run too far, limited losses after losing three percent in early trading. Nvidia pushed more than 1 percent into the green mid-session on Wall Street despite a Bloomberg report that it has been subpoenaed by US antitrust regulators as part of a probe into its practices.

London, Paris, and Frankfurt all finished modestly down while the Dow was just into positive territory just over two hours into trading, while the Nasdaq limited its losses to 0.1 percent. Wall Street was digesting a fall in the number of vacancies at US companies, underpinning concerns that economic growth is fading.

Another factor taking sentiment down was data showing that the US trade deficit expanded to $78.8 billion in July, the largest since mid-2022. The dollar also lost ground, as the euro rose 0.35 percent against the greenback to $1.1082, and also against the pound, which gained 0.27 percent to $1.3150. More sharply, it also fell 0.83% against the Japanese currency, to 144.28 yen to the dollar.

Oil prices also dipped on fears global demand will remain weak. In Asia, Japan saw a slew of session losers as Advantest plunged 7.7 percent and Tokyo Electron fell more than eight percent, while Sony lost three percent. TSMC shed more than five percent in Taipei, with SK Hynix dumping eight percent in Seoul and Samsung off more than three percent. Tokyo and Taipei each dived more than four percent overall, while Seoul was 3.2 percent lower.

Elsewhere, oil prices rebounded but then fell back slightly after Tuesday’s heavy selling sparked by demand worries linked to a weak Chinese economy and questions over the US outlook. OPEC’s consideration of output hikes added to the pain, analysts said.

Worries about the US economy burst back onto the scene after figures showed a marginal improvement in factory activity in August, but it still remained in contraction for a fifth successive month. The figures come days before a closely watched report on non-farm payrolls, which could have a big impact on Federal Reserve officials’ decision-making going into next week’s policy meeting. The bank is expected to cut interest rates, but investors are uncertain how big it will be, with most tipping a reduction of 25 basis points, though a below-forecast reading is seen boosting the chances of a 50-point move.