NVIDIA’s Market Cap Drops Below $2 Trillion Amid Geopolitical Tensions

NVIDIA’s market cap falls to $2 trillion

The New York stock market showed a mixed performance as technology stocks, including NVIDIA, suffered large-scale adjustments due to risks in the Middle East due to Israel’s attack on Iran.

New York Stock Exchange, USA. Reuters Yonhap News

As the preference for safe assets grew, the Magnificent 7 (M7, Apple, Amazon.com, Alphabet, Microsoft, Meta Platform, Tesla, and Nvidia) fell sharply in the stock market.

The Nasdaq index fell more than 2%, and the Standard & Poor’s (S&P) 500 index fell below the 5,000 mark.

On the 19th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average ended trading at 37,986.40, up 211.02 points (0.56%) from the previous day.

The Standard & Poor’s (S&P) 500 index fell 43.89 points (0.88%) to 4,967.23, falling below the 5,000 mark. The Nasdaq index was trading at 15,282.01, down 319.49 points (2.05%).

The Dow rose more than 200 points. On the other hand, the S&P 500 index and the Nasdaq index fell for 6 consecutive trading days. Based on the closing price, the S&P 500 index reached its lowest point since February 13.

In particular, as the correction of major technology stocks was evident, the Nasdaq index reached its lowest level since January 31.

The New York stock market remained mixed following the news of Israel’s attack on the Iranian mainland. As analysis emerged that Israel had carried out a retaliatory attack on Iran but used limited military options to avoid escalation, volatile investment sentiment calmed somewhat.

A senior US official told CNN that Israel had not attacked Iran’s nuclear facilities. This official said the Israeli airstrikes were in retaliation for Iranian airstrikes on the 13th and 14th and would be carried out in a ‘limited manner.’

However, with both countries exchanging attacks on the mainland and the weekend approaching, the geopolitical risk has not been resolved.

Ahead of the weekend, major tech stocks fell as risk-averse sentiment combined with a preference for safe-haven assets emerged. With geopolitical instability in the Middle East and a slowdown in inflation, and an interest rate cut by the US Federal Reserve expected to be impractical, market sentiment has shifted largely towards risk aversion and profit taking.

Austan Goolsby, President of the Federal Reserve Bank of Chicago, said at the event that the increase in US inflation this year has been stagnant, adding, “It makes sense now to wait and be clearer than to move.”

Looking at all stocks, the Magnificent 7 stocks fell sharply.

NVIDIA plunged more than 10% during the day. Market capitalization also fell below the $2 trillion mark. Tesla fell about 1.9%. The stock price suffered a fall due to the recent personnel adjustment and news of the Cybertruck recall.

Amazon.com fell about 2.5%, and Alphabet A, the parent company of Google, fell more than 1%. Apple also fell by more than 1%. Meta Platforms (Facebook) plunged about 4%. Netflix, which posted better expectations than Wall Street after the market closed the previous day, also plunged more than 9%.

Netflix said the number of euro subscribers increased by 16% in the first quarter, but added that it would not announce the number of paid subscribers in 2025, raising doubts in the market.

“Investors breathed a sigh of relief when they realized that Israel’s response was calm and designed to minimize further deterioration,” George Ball, chairman of Sanders Morris, told CNBC “Investors are also very concerned.”

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