Skip to content

$1 trillion wiped from the stock market in a day

$1 trillion wiped from the stock market in a day

Tuesday, September 3, saw a dramatic stock market sell-off, confirming investor fears about the ‘September Effect,’ as the ninth month of the year has historically been the weakest for stocks.

Throughout the day’s trading, all three benchmark indices – the S&P 500, Dow Jones Industrial Average, and Nasdaq 100 – fell between 1.5% and 3.15%, reflecting a broad sell-off.

S&P 500, DJIA, Nasdaq 100, and BTC 1-day price charts. Source: Google

Along with overall concerns about trading in September, the downtrend was driven by a relatively weak manufacturing report, which saw a moderate sector contraction. Construction spending’s 0.3% decline was the most singled-out metric.

Overall, the day proved the weakest for the U.S. stock market since the bloodbath of early August, and as much as $1.05 trillion was wiped out in the single-session crash.

Furthermore, traders have another headache ahead as the next employment report is due on Friday, September 6. It is worth remembering that the August sell-off was triggered, in large part, by the convergence of weak U.S. jobs data and the unwinding of the yen carry trade.

Stock, crypto, and commodity markets all experience the sell-off

The drop was not confined solely to the benchmark stock market indices as shares of most American companies – inducing the well-performing blue-chips such as Nvidia (NASDAQ: NVDA) and Apple (NASDAQ: AAPL) saw massive pullbacks.

Nvidia, in particular, shocked investors as it was, at one point on September 3, down 12%. Ultimately, it ended the day 9.53% in the red, with a modest decline persisting into the extended session.

In the cryptocurrency market, Bitcoin (BTC) briefly fell below $56,000 and, despite experiencing some recovery, remains well below its relatively stable recent levels near $60,000. BTC price today stands at $56,547.

As is frequently the case, most other major cryptocurrencies followed suit and are overwhelmingly in the red in the 24-hour charts.

Finally, the selling pressure has also seemingly spread to the commodity markets as gold experienced a sharp – yet limited as it amounts to no more than 0.42% by press time – drop. Oil likewise collapsed in price, erasing all prior 2024 gains.

Gold 1-day and oil year-to-date (YTD) price charts. Source: TradingView

What is next for the financial markets?

Analysts’ reaction to the downturn was mixed. Despite the dramatic price action, an air of calm persisted. 

Jim Cramer, for example, made a series of X posts between September 3 and 4 in which he conceded the dip was ‘brutal’ and likely a ‘harbinger for more selling.’ Still, he overall appeared to take a stance that the drop was more the result of a temporary panic than the start of a major collapse or recession.

Part of the reason for the relative stoicism is that a September sell-off was broadly expected. 

Fundstrat’s Tom Lee, for example, spoke in the Tuesday pre-market about a likely 7-10% stock market pullback but also explained that, while the situation will be unstable and dangerous, it may prove more of a ‘buy the dip’ opportunity than a start of something catastrophic.

Buy stocks now with eToro – trusted and advanced investment platform


Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

Best Crypto Exchange for Intermediate Traders and Investors

  • Invest in cryptocurrencies and 3,000+ other assets including stocks and precious metals.

  • 0% commission on stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.

  • Copy top-performing traders in real time, automatically.

  • eToro USA is registered with FINRA for securities trading.

30+ million Users
Securities trading offered by eToro USA Securities, Inc. (“the BD”), member of FINRA and SIPC. Cryptocurrency offered by eToro USA LLC (“the MSB”) (NMLS: 1769299) and is not FDIC or SIPC insured. Investing involves risk, and content is provided for educational purposes only, does not imply a recommendation, and is not a guarantee of future performance. Finbold.com is not an affiliate and may be compensated if you access certain products or services offered by the MSB and/or the BD

Read Next:

Finance Digest

By subscribing you agree with Finbold T&C’s & Privacy Policy

Related posts

Sign Up

or

By submitting my information, I agree to the Privacy Policy and Terms of Service.

Already have an account? Sign In

Disclaimer: The information on this website is for general informational and educational purposes only and does not constitute financial, legal, tax, or investment advice. This site does not make any financial promotions, and all content is strictly informational. By using this site, you agree to our full disclaimer and terms of use. For more information, please read our complete Global Disclaimer.