Tech rout hits U.S. stocks; Euro surges on Lagarde

U.S. stocks tumbled at the open after disappointing results from Meta Platforms Inc. wiped more than US$200 billion from its market value. The euro spiked higher with European bond yields after the region’s central bank signaled concern over persistently high inflation.

U.S. stocks tumbled at the open after disappointing results from Meta Platforms Inc. wiped more than US$200 billion from its market value. The euro spiked higher with European bond yields after the region’s central bank signaled concern over persistently high inflation.

Comments from European Central Bank President Christine Lagarde that were perceived to be hawkish prompted investors to bring forward bets on ECB interest-rate hikes, with the amount of tightening priced for this year lifted to around 40 basis points from 25 before the latest decision.

Treasuries followed the euro zone lower and the dollar fell. Meanwhile, the S&P 500 fell 1.3 per cent while the tech-heavy Nasdaq 100 Index shed 2.3 per cent, halting the indexes’ biggest consecutive gains since 2020. 

Weak numbers from Facebook owner Meta to Spotify Technology SA jolted investors who had bet a strong earnings season would keep equities attractive and counter some of their lingering worries including Federal Reserve tightening and stubborn inflation. That’s stalled the biggest four-day gains in MSCI Inc.’s gauge of world stocks and refueled traders’ switch into less expensive value stocks.

“What people care about is earnings and inflation,” said Ipek Ozkardeskaya, a senior analyst at Swissquote. “Disappointing Facebook results, and a plunge in Meta shares in the afterhours trading calls for a red session in the U.S.”