The worst inflation in 40 years and a hawkish Federal Reserve tone on interest rates pushed U.S. stocks lower again today, kicking off a slump that saw technology and chip stocks fall the most in two years.
Among the three major U.S. stock indexes, the Dow Jones Industrial Average shed thousands of points. The Nasdaq fell more than 4 percent. The NASDAQ 100 fell 5 percent, its worst in two weeks and its biggest drop since September 2020.
Among major enterprises, Meta fell more than 5%, the first drop in five days; Amazon and Netflix fell more than 7%, both giving up this week’s gains; Apple fell 5.6%, its lowest since early October. Microsoft fell 4.6% to its lowest since June. Alphabet, Google’s parent company, fell nearly 4%, its lowest since April. Tesla fell nearly 7% to $700, its lowest level since August.
Among chip stocks, Intel fell 4.6%, its lowest since October 2017. AMD fell more than 6%; NVIDIA fell nearly 7 percent, giving up its weekly gain.
But that’s just the tip of the iceberg in the tech world. In fact, it’s happening underwater. Options on unlisted star unicorns have collapsed in secondary market valuations, soon-to-be public companies face bloody IPO, fund houses that were once the industry’s champions face huge losses, and investment banks that pumped hot money into the industry have turned around and sought to protect themselves.
This week SoftBank said it would slash its investments in innovative companies in the technology sector by 50-75% after billions of dollars of losses. Tiger Global, another 21-year-old investment bank, has lost $17 billion this year in the tech sell-off, one of the biggest losses in hedge fund history.