Nvidia shares fall 4% amid tough week for chip stocks

Shares of Nvidia ( NVDA ) fell 4% on Friday as the semiconductor sector led a market selloff in the final trading session of September’s volatile first week.

Tech stocks ( XLK ) fell after the monthly jobs report showed the unemployment rate fell to 4.2 percent in August from 4.3 percent in July, prompting some analysts to predict the Federal Reserve will cut rates by 25 basis points instead of 50 basis points to its policy. meeting at the end of this month.

Technology, which is normally the beneficiary of an interest rate cut cycle, led the market decline. Investors have increasingly questioned whether capital spending on technology infrastructure will continue and whether the boom in AI stocks has peaked.

“They (investors) won’t get the support they were looking for from the Fed, and there are still questions about where spending is going, and the economy is OK, but not great,” Peter Tchir, head of Macro. Strategy at Academy Securities told Yahoo Finance.

Nvidia’s stellar growth this year has underpinned the market’s performance. The stock led the market in a sharp rally last month, but failed to continue the rally in late August after a weak reception of the company’s quarterly results.

Shares of Nvidia are down about 13% in the past four trading sessions.

Shares of Broadcom ( AVGO ) also fell 10% after the semiconductor giant’s weak fourth-quarter sales forecast overshadowed its earnings pace.

Orders for the company’s AI chips rose, while broadband spending lagged behind.

“Clearly the street was not happy. They were looking for some kind of huge number… But this is a bit more of a business diversification story,” Futurum Group CEO Daniel Newman told Yahoo Finance. Friday.

“Underlying activity has slowed a bit, but has some favorable conditions to bounce back over the next few quarters.” he added.

Shares in ASML ( ASML ) also fell 5% on Friday after the Dutch government announced increased export controls for advanced chip-making equipment, citing national security concerns.

Morgan Stanley also removed the company from its “Top Pick” category for European semiconductors and lowered its price target slightly.

Ines Ferre is a senior business reporter for Yahoo Finance. Follow X at @ines_ferre.