Nasdaq off to tough start to September as Nvidia sell-off continues

U.S. stocks fell on Tuesday, kicking off a historically tough month for the market, as AI darling Nvidia (NVDA) and semiconductor stocks led the tech selloff.

The Dow Jones Industrial Average (^DJI) fell 1%, or more than 450 points. The S&P 500 Average (^GSPC) dropped 1.5%, and the tech-heavy Nasdaq Composite Index (^IXIC) dropped nearly 2.5%.

The main economic news scheduled this week is the August employment report on Friday, but Tuesday will provide a glimpse into construction activity that will affect the housing market.

The Commerce Department said Tuesday that construction spending fell 0.3% in July, unchanged from the previous month. Projections had called for spending to fall just 0.1%.

The slightly larger-than-expected decline in spending reflects rising mortgage rates and increased supply.

Weak demand has builders holding back on new projects, with single-family home construction falling to a 16-month low in July.

But mortgage rates continued to fall in August as expectations grew that the Federal Reserve would cut interest rates at its September policy meeting. Rates are expected to fall further as would-be homebuyers wait for better rates.

Borrowing costs are likely to fall, but home affordability remains an issue.

Fannie Mae’s Home Buyer Sentiment Index, a gauge of consumer sentiment about the housing market, fell in July, highlighting how homebuying difficulties are slowing home transactions.

With just months to go until the election and the success or failure of generative AI detection technology unclear, experts predict we’ll see more generative AI-based content aimed at sowing discord among voters, Yahoo Finance’s Dan Howley reports.

The 2024 election will be the first US presidential election in the era of generative AI, and we’re already seeing examples of the technology being used to influence how Americans vote.

On August 18, former President Donald Trump shared a series of AI-generated images of Taylor Swift fans wearing pro-Trump shirts, but the photos originally appeared in a post marked as satire on X (formerly Twitter). In January, deepfake phone calls were made to some New Hampshire residents in an attempt to dissuade them from participating in the state’s Democratic primary election.

“The danger is, if you have AI-generated disinformation like the Taylor Swift image, and millions of people are exposed to it and only 10 or 15 percent don’t realize it’s fake, that’s a significant number for electoral purposes,” explained Lance Hunter, a political science professor at Augusta University.

“In battleground states, the margin of victory can be less than 1% so a small number of people being exposed to this misinformation and not realising it is could affect the outcome of the election,” Hunter added.

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Below are some of the stocks that led Yahoo Finance’s trending ticker page during Tuesday morning trading.

Boeing (BA): The plane maker’s shares fell 6% on Tuesday morning after Wells Fargo cut its price target, highlighting the pressure on the company’s cash flow as it works to develop new planes. The company also faces the possibility of a mass strike, with workers in Washington state planning to walk out if no agreement is reached by the end of the month.

United States Steel (X): Shares of the steelmaker fell nearly 4% after Democratic candidate Kamala Harris said the company should remain U.S.-owned and operated in response to a proposed takeover by Japan’s Nippon Steel Corp. Republican candidate Donald Trump also opposes the sale.

Nvidia (NVDA): Shares of the AI ​​chip designer fell 5% in morning trading Tuesday. The stock price tumbled after the company’s earnings report last week didn’t impress Wall Street. The stock has fallen more than 10% over the past five days, highlighting tough times for the embattled AI and chip company amid growing questions from customers about investment returns.

Unity (U): The video game software developer rose more than 7% on Tuesday after a Morgan Stanley analyst raised the stock to overweight from equal weight, noting strength in the company’s game engine business and sustained market share.

U.S. stocks fell on Tuesday, kicking off a historically rough September for markets as attention turned to the weekly labor data led by the crucial monthly employment report.

The Dow Jones Industrial Average (^DJI) fell about 0.5% following a bullish session before the Labor Day holiday. The S&P 500 (^GSPC) lost 0.6% and the tech-heavy Nasdaq Composite Index (^IXIC) dropped 0.8%.