Big tech swept into selloff erasing US$1T from Nasdaq 100
BNN Bloomberg
Traders are shunning technology stocks amid mounting risks from soaring Treasury yields and hawkish commentary from the U.S. Federal Reserve.
Traders are shunning technology stocks amid mounting risks from soaring Treasury yields and hawkish commentary from the Federal Reserve.
The Nasdaq 100 Stock Index sank more than 2 per cent Monday, adding to losses sustained last week that have erased over US$1 trillion in market value from the tech-heavy benchmark in the past five sessions. Microsoft Corp. tumbled 3.9 per cent, its worst decline in more than a month. Chipmaker Nvidia Corp. sank as much as 6.3 per cent, extending losses sustained over the past five sessions to 20 per cent. The stock hasn’t had a five-day run this bad since March 2020.
“There’s so much pessimism,” said Kim Forrest, chief investment officer and founder of Bokeh Capital Partners. “The war in Ukraine, higher interest rates, recession fears, China’s COVID lockdowns and then oil prices -- it’s all very gloomy.”
Those macro-economic risks are causing even some of the most outspoken bulls to grow more cautious. JPMorgan Chase & Co.’s Marko Kolanovic advised clients to take some profits, citing risks from geopolitics and Fed tightening, just a month after he advised adding to stock holdings.
Kolanovic may be onto something, however, as the latest bout of selling comes after a three-week rally that sent the Nasdaq soaring 16 per cent from a March 14 low as investors snapped up growth stocks amid optimism that they would be well-positioned to outperform as economic growth slows. Now, that optimism has been replaced by fear that an aggressive Fed bent on fighting inflation at all costs will send the economy into recession.
