In a single day, $1.05 trillion was wiped from the U.S. stock market. The decline is one of the largest in a single day in recent memory and also reflects a mix of disappointing economic data and massive struggles among huge companies.

It is understandable that investors are concerned as the current recession raises earnest and troubling questions about the stability of this market.

Stock market: Economic data drives decline

The Dow Jones Industrial Average fell more than 626 points in the first few seconds of the opening bell. It lost more than 700 points by the close and ended the day down more than 2% at around 40,936.93.

The sell-off was triggered by delicate manufacturing data, the fifth straight month of decline. Investors were concerned about the news, which ultimately led to massive sell-offs across the board.

The S&P 500 also fell about 2.4%, closing at about 5,530 points. Technology was the hardest hit during the period, with Nvidia’s shares falling 9.5%. It was the biggest single-day decline of any U.S. company, wiping out an astonishing $279 billion from its market value.

The price of crude oil fell to $72.66 a barrel, reflecting concerns about global demand and deepening market problems.

The US stock market lost $1.05 trillion in value today. Crypto remained relatively stable. photo:twitter.com/mO6xdCGkni

— MartyParty (@martypartymusic) September 3, 2024

Nasdaq, hardest hit

The Nasdaq Composite was the weakest among the majors, falling nearly 3.5% to 17,136.30. It was its worst day since early August. Because the Nasdaq is overweight in technology stocks — even more so after Nvidia’s fall — it suffered bulky losses.

As technology stocks continue to fall, investors are left guessing how long it will last and what it could mean for the broader market.

Image: Daily Sabah

Impact on cryptocurrencies

Interestingly, when the stock market was going crazy, cryptocurrencies like Bitcoin and Ethereum, they have remained fairly resilient. Bitcoin has lost 3% of its value, while Ethereum has fallen below $2,500.

History also shows that September has been the most hard month for stocks and cryptocurrencies. It typically sees increased volatility for traders as they prepare for monthly economic reports and interest rate changes.

BTC market cap currently at $1.16 trillion. Chart: TradingView.com

Bitcoin market cap stable

Despite the current decline, Bitcoin’s market capitalization still remains at a robust level of around $1.2 trillion, with an annualized return of 128%.

The short-term outlook is bleak, but some analysts cautiously say a recovery is in the cards. They pin their optimism on the upcoming US election and a planned $14.5 billion payout to FTX creditors.

But it all depends on what is reported in future economic data. If the delicate reports continue, there could be more pain.

But what really underscores the larger scale of uncertainty is the $1.05 trillion loss that the U.S. stock market has suffered. As investors try to navigate the fallout from delicate economic data and massive declines at key companies, all eyes are on the next reports and political events that will unfold.

Sure, some feel they have hit rock bottom, but there are challenges ahead and no one knows how long it will take for this sector to recover.

Featured image from TipRanks, chart from TradingView