Today, there are signs of significant fluctuations in the Japanese and South Korean stock markets. On the morning of September 4, the Nikkei 225 index opened down 1.67%. Subsequently, the decline rapidly expanded and once exceeded 4%. Currently, the decline has expanded to 3.47%. Selling pressure centered on semiconductor stocks rapidly expanded. At the same time, the South Korea Kospi index opened down 2.29% today and is currently down 2.31%.
①Affected by weak U.S. manufacturing data, the three major U.S. stock indexes closed with declines hitting a new high in a month yesterday.
This time, the fluctuations in Japanese and South Korean stocks are related to the weak manufacturing data released by the United States yesterday. In August, the U.S. ISM manufacturing index remained below the boom-bust line for the fifth consecutive month, exacerbating market concerns about a U.S. economic recession.
The report released by the Institute for Supply Management (ISM) yesterday stated that the U.S. manufacturing index in August rose 0.4 points to 47.2, falling short of expectations of 47.5. This data has remained below 50 for the fifth consecutive month, indicating continued contraction in manufacturing industry activities. The report also shows that the production index in the United States continued to decline for the fifth consecutive month in August, reaching the lowest level since May 2020. The new orders index dropped to a 15-month low, and export orders contracted at the fastest pace since the beginning of this year.
In addition to the negative news on the U.S. manufacturing front, Nvidia's share price plunged 9.5% on Tuesday, causing the chipmaker's market value to evaporate nearly $300 billion and dragging down chip stocks. Intel fell nearly 8%, Marvell fell 8.2%, and Broadcom fell more than 6%. AMD fell 7.8%, and Qualcomm fell nearly 7%. The chip fund VanEck Semiconductor ETF (SMH) fell 7.5%, the largest one-day decline since March 2020.
In terms of news, according to media reports, Nvidia received a subpoena from the U.S. Department of Justice yesterday, involving an antitrust investigation in the field of artificial intelligence computing. This move means that the U.S. government has taken another step closer to formally suing Nvidia.
②The Wall Street downturn has also spread to the Asian market. At the opening today, the Japanese and South Korean stock markets fell first to show respect.
The sharp drop in Japanese and South Korean stock markets this morning is influenced by the sharp drop in U.S. stocks overnight. On Tuesday, local time, September 3, the three major U.S. stock indexes closed lower collectively. By the close, the Dow Jones Industrial Average fell 626.15 points, or 1.51%, to 40,936.93 points; the Nasdaq Composite Index fell 577.32 points, or 3.26%, to 17,136.30 points; and the S&P 500 Index fell 119.47 points, or 2.12%, to 5,528.93 points.
Today, there are signs of significant fluctuations in the Japanese and South Korean stock markets, seemingly following the decline on Wall Street on Tuesday.
The decline in the Tokyo Stock Price Index (TOPIX) is also significant. Shortly after the opening, the decline exceeded 3%, creating the largest intraday decline in nearly a month since August 6 this year. The Nikkei 225 index futures also showed a very fierce decline, with the intraday decline once exceeding 4%.
Among the constituents of the Nikkei 225 index, electronics and chip stocks led the decline. Many stocks such as Renesas Electronics and ADVANTEST had intraday declines exceeding 9%. The share prices of well-known listed companies in Japan such as Tokyo Electric Power, Nippon Steel, SoftBank Group, Hitachi, and NEC also fell more than 5% intraday.
While the Japanese stock market is falling, the South Korean stock market has also plunged significantly. The South Korea Composite Index's intraday decline reached 3%, showing a downward gap. The South Korea KOSDAQ index's intraday decline exceeded 3%.
In addition, the commodity market is also experiencing violent fluctuations. International crude oil has also recently seen a sharp drop. Among them, Brent crude oil futures once plunged more than 5% on September 3.
Stock markets in Hong Kong and Taiwan also opened lower this morning. Among them, the stock market in Taiwan, and China has fallen sharply, and the intraday decline is fierce. The Taiwan Weighted Index's intraday decline once exceeded 5%. Leading stock TSMC's intraday decline once exceeded 5%. Hon Hai's intraday decline once exceeded 7%, and Quanta's intraday decline once exceeded 8%.
In addition, the "fear index" VIX (S&P 500 Volatility Index) closed at 20.72 and once rose to 21.99 intraday. Before this, since August 14, the index has not broken through the 20 mark.
③The chip industry is again the "hardest hit area" today. Investors are observing the impact of Nvidia's sharp drop on its Asian partners.
In the past year, chip stocks have been rising. Investors are optimistic that the AI boom will require companies to buy more semiconductors and memory to meet the growing computing needs of AI applications. Due to its dominant position in the AI data center chip market, this sector is led by Nvidia.
Investors are now watching the spillover effect of the sell-off of Nvidia in Asia, especially the next performance of Nvidia's suppliers - TSMC, SK Hynix, and Samsung Electronics.
As of now, TSMC's share price has risen slightly and remained stable; but SK Hynix's share price has fallen by more than 7%, and Samsung Electronics' share price has also fallen nearly 3%.
In addition, major European stock indexes also fell collectively overnight. The French CAC40 index fell 0.93%, the German DAX30 index fell 0.97%, and the British FTSE 100 index fell 0.78%. Asian markets generally opened weakly today. The Australian S&P/ASX 200 index fell 0.91%; the TPE x50 index in Taiwan, and China fell by more than 1%. The market is observing whether there will be more declines today and whether "Black Monday" a month ago will repeat.
According to Jwview, Zhang Cuixia, chief investment advisor of Jufeng Investment, pointed out that the large decline in Japanese stocks is the result of a combination of multiple factors such as slowing economic growth, inflationary pressure, Federal Reserve policies, and market sentiment. At the same time, investment institutions represented by Warren Buffett are also aggressively selling stocks to lock in cash.
It is worth noting that the last non-farm payroll report before the Federal Reserve's September interest rate decision will be released this Friday. If the downward trend of inflation is established, this report will also determine whether there will be a rate cut in September. After continuous interest rate hikes by the Federal Reserve, the interest rate level has reached as high as 5.5%. Whether it is a cumulative rate cut of 150 basis points or 200 basis points later, the loose monetary policy will take about 6 to 8 months to transmit to the market. If there are more signs of weakness in the U.S. economy at the beginning of 2025, the economic situation may be very different, and the original soft landing may turn into a hard landing.
However, SIC Electronic Components believes that when the stock market plunges, the chip industry is the first to be affected, and the AI chip industry is no exception. But in the long term, the demand for AI chips is still strong. Investors should focus on technological innovation and market demand rather than short-term fluctuations. 
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