Shares of NVIDIA (NVDA) fell 4% on Friday as the semiconductor sector led the market sell-off in the final trading session of a volatile first week of September.
Technology (XLK) stocks fell after the monthly jobs report showed the unemployment rate fell to 4.2% in August from 4.3% in July, and some analysts expect the Federal Reserve to cut interest rates by 25 basis points rather than 50 at its policy meeting later this month.
Technology stocks, which typically benefit from interest-rate-cutting cycles, led the market decline as investors questioned whether capital spending on tech infrastructure will continue and whether the AI stock boom has peaked.
“Investors won’t get the support they were hoping for from the Fed and questions still remain about where spending will go. The economy is decent but not great,” Peter Char, head of macro strategy at Academy Securities, told Yahoo Finance.
Nvidia’s impressive growth this year has underpinned its market performance: The company’s shares led a sharp market recovery last month, but failed to sustain its gains in late August after a muted reaction to the company’s quarterly earnings.
Nvidia shares have fallen about 13% over the past four trading sessions.
Shares of semiconductor giant Broadcom (AVGO) also fell 10% after the company reported weak fourth-quarter sales guidance and better-than-expected profits.
The company saw a surge in orders for its AI chips, but spending on broadband slumped.
“Obviously the market wasn’t happy. They were hoping for some big numbers. But this is also about diversification,” Futurum Group CEO Daniel Neumann told Yahoo Finance on Friday.
“Our core business is slowing slightly, but is well positioned for a recovery over the coming quarters,” he added.
Shares of ASML (ASML) also fell 5% on Friday after the Dutch government said it would tighten export controls on advanced semiconductor manufacturing equipment, citing national security concerns.
Morgan Stanley also removed the company from its European semiconductor “top pick” and slightly lowered its target price.
Ines Ferre is a senior business reporter at Yahoo Finance. Follow her on X at @ines_ferre.
