Losses in tech stocks rose on Wall Street on Friday afternoon, pushing the Nasdaq to its biggest monthly loss since the financial crisis in 2008. Amazon’s sharp decline was also reflected in the indices after the internet retail giant. announced its first losses since 2015.
The S&P 500 was down 3.1% at 3:36 pm Eastern, as technology and communications stocks were one of the biggest lags in the benchmark index. The Dow Jones Industrial Average fell 741 points, or 2.1%, to 33,193, while the Nasdaq was down 3.5%.
Major indices swayed between declines and rallies throughout the week as the latest round of corporate earnings entered the market. Investors looked at a particular range of financial results from large technology companies, industrial firms and retailers.
The volatile week marks the end of a miserable month as traders mourn the hard drug the Federal Reserve is using to fight inflation: higher interest rates. This will increase the amount of debt for people who buy cars, use credit cards, and take out mortgages to buy homes.
The S&P 500 is on track for an 8.2% loss in April, which will be the worst month since the pandemic began. The Nasdaq has a loss rate of 12.7%, which will be the biggest monthly decline since October 2008.
Big Tech drives the market to low levels throughout the month as traders avoid the high-tech sector. The technology released huge profits during the pandemic and is now starting to overvalue, mostly due to the sharp rise in interest rates as the Fed strengthens its fight against inflation.
Internet retail giant Amazon It fell 14.2%, the biggest drop in the S&P 500, after announcing an extraordinary loss per quarter and after offering investors a bleak outlook on earnings. Amazon’s weak update comes as Wall Street worries about a potential slowdown in consumer spending along with rising inflation.
Prices of everything from food to gas were rising as the economy recovered from a pandemic and there was a strong connectivity between high demand and backward supply. Russia’s invasion of Ukraine only raises concerns about inflation as it raises the prices of oil, natural gas, wheat and corn.
On Friday, the Commerce Department said the inflation rate is being closely monitored by the Federal Reserve. 6.6% increase in March Compared to a year ago, the highest 12-month jump in four decades is further evidence that rising prices are putting pressure on the family budget and the health of the economy.
The latest report on rising inflation in the United States follows a report from the statistical agency Eurostat, which shows inflation It hit a record high in April – 7.5% For 19 countries using the euro.
Bond yields rose after warm inflation figures. The 10-year Treasury interest rate rose from 2.85% to 2.89%.
Rising inflation has pushed central banks to raise interest rates to reduce the impact on businesses and consumers.
Much of Wall Street’s anxiety in April focused on how quickly the Fed would raise its benchmark interest rate and whether aggressive growth would slow economic growth. The Fed chairman noted that the central bank could raise short -term interest rates to double the normal amount for future meetings, starting next week. It has already raised its key rate once a day, the first such increase since 2018, and Wall Street expects some big increases in the coming months.
Investors spent most of April transferring money from Big Tech companies whose shares had low interest rates to less risky areas. The S&P 500 Consumer Product Sector, which includes many manufacturers of household and personal products, is on track to become the only sector on the benchmark index to gain in April. Other safe gaming sectors, such as utilities, outperform the broader market, and technology and communications stocks are among the biggest losers.
Source: Huffpost
