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Global markets tumbled Monday as fears of a U.S. recession intensified, sparked by disappointing jobs data and compounded by a reported delay in Nvidia’s (Nasdaq: NVDA) next-generation AI chip production.

The confluence of events sent shockwaves through financial markets, with U.S. stocks poised for their worst opening of the post-pandemic era and Japanese markets experiencing a severe selloff overnight.
 

Nvidia Chip Delay Rattles Tech Sector

Nvidia, a key player in the artificial intelligence chip market, reportedly faces a setback in the production of its next-generation “Blackwell” B200 AI chip.

Sources familiar with the matter indicate that a design flaw, discovered late in the production process during test runs with Taiwan Semiconductor Manufacturing Company (NYSE: TSM), has pushed back the timeline by at least three months. Mass shipments of the chips, initially slated for late 2024, may not occur until early 2025.

The delay has far-reaching implications for the tech industry. Major cloud providers, including Microsoft (NASDAQ: MSFT), Google (NASDAQ: GOOG), and Meta (NASDAQ: META), have reportedly ordered tens of billions of dollars worth of these chips.

The setback could impact Nvidia’s revenue projections and affect competitors like Advanced Micro Devices (NASDAQ: AMD). In response to the news, Citigroup has already cut its fiscal 2025 revenue estimates for Nvidia, and the company’s stock, along with other AI-related stocks, plunged in pre-market trading.
 

Global Markets Reel from US Recession Fears

The broader market turmoil extends beyond the tech sector. U.S. stocks were set for a sharp decline at the opening bell, with futures indicating drops of 3% for the Dow Jones Industrial Average, 3.4% for the S&P 500, and 5% for the tech-heavy Nasdaq. This would mark the third consecutive day of significant drawdowns in U.S. markets.

The selloff was triggered by Friday’s worse-than-expected U.S. jobs report, which showed the unemployment rate unexpectedly climbing to 4.3%.

The data heightened concerns about a potential recession and raised questions about the Federal Reserve’s cautious approach to interest rate cuts. As a result, investors flocked to U.S. Treasury bonds as safe-haven assets, pushing the yield on the 10-year note to 3.683%, its lowest level since June 2023.

The ripple effects were felt globally, with Japanese markets experiencing one of their worst days since the 1987 “Black Monday” crash. One of Japan’s main stock indexes plummeted 12.2%. Cryptocurrencies were not spared, with Bitcoin (BTC) falling nearly 14% to around $50,000 and Ethereum (ETH) dropping 17% to about $2,200.

As markets opened for the week, major tech companies faced significant pre-market declines, with Nvidia down 14%, Apple (Nasdaq: AAPL) down 9%, Amazon (Nasdaq: AMZN) down 8%, and Microsoft down 5%.

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