Microsoft shares plummeted after falling more than 11% in four days, while the broader market signaled some relief with a small gain. The company’s chief executive said that they would be looking to start making changes very soon but did not specify what those changes are. Experts say if Microsoft can’t successfully fix their software issues, it could spell doom for the stock price and Microsoft as well.
The “best tech stocks to buy now” is a topic that is being discussed often. The stock market has been sliding and many investors are looking for the best tech stocks to invest in.
Technology companies fell further on Thursday, as the likelihood of interest rate hikes drove Treasury rates to their highest levels since the epidemic began.
At the start of trading, the Nasdaq Composite fell 0.5 percent. The index fell the most in a single day since February on Wednesday, as minutes from the Federal Reserve’s most recent meeting revealed that members are considering a quicker rate hike schedule. The S&P 500 index slipped 0.1 percent, while the Dow Jones Industrial Average remained steady.
Treasury rates were set to climb for the fourth day in a row, underscoring investors’ belief that the fast-spreading Omicron type would not prevent the Fed from tightening monetary policy to keep inflation under control. Before sliding back to 1.730 percent, the yield on 10-year Treasury notes surged to 1.751 percent, which would be its highest closing level since January 2020.
Tesla was down 1%, Apple was down 0.3 percent, and Netflix was down 0.9 percent. Rising rates boosted bank equities including Bank of America and JPMorgan Chase.
Global markets have fallen in lockstep with Wall Street. In Europe, tech companies fell, contributing to a 1.2 percent drop in the Stoxx Europe 600 index. The Nikkei 225 in Japan sank 2.9 percent, while the Shanghai Composite Index in China declined 0.3 percent.
Investors are prepared for a period of volatility in tech equities, which have been driving the market upward since the early-pandemic dip in 2020. Low interest rates, along with blockbuster profits aided by the transition to home working, have boosted the stock prices of businesses like Apple and Microsoft.
Investors are ready for a period of high volatility in the tech sector.
courtesy of Shutterstock/Justin Lane
Rates, on the other hand, seem to be on the rise, maybe as early as March. Although investors believe equities may continue to increase in a time of increasing rates, which represent a strong economy, tech companies and momentum stocks like Tesla are considered as particularly susceptible.
“We might be in for a bumpy ride,” warned Lars Skovgaard Andersen of Danske Bank Wealth Management. Mr. Andersen believes the volatility will remain at least until tech firms report profits later this month, when he believes investors will be enticed to repurchase those stocks.
Mr. Andersen views the selloff as a buying opportunity, but he plans to focus on the broad market and European banks, which would gain from rising interest rates, rather than U.S. tech.
On the economic front, the Labor Department reported 207,000 first unemployment claims last week, a barometer for layoffs. A tighter job market is one of the factors behind the Fed’s decision to raise rates sooner than it had previously indicated.
Cryptocurrencies have been falling in lockstep with technology equities, indicating that investors are exiting more speculative areas. According to CoinDesk, Bitcoin declined 2% to $42,778 on Thursday, compared to its value at 5 p.m. Wednesday.
While the SEC hasn’t taken any substantial steps against large crypto exchanges, it has threatened to punish firms that provide crypto loans. Dion Rabouin of the Wall Street Journal discusses why this particular aspect of the crypto market has sparked such a significant response. Mark Lennihan/Associated Press photo
The release of minutes from the Federal Reserve’s December policy meeting sparked the selloff. Officials expected increasing inflation and a tight labor market would necessitate raising short-term rates “sooner or at a quicker pace than members had previously anticipated,” according to the documents.
According to the minutes, several officials felt the Fed should begin decreasing its $8.76 trillion bond and other asset portfolio immediately after raising rates. Government bond rates have risen due to investor demand. As a result, tech companies have suffered since future cash flows are now worth less in today’s terms when a greater discount rate is used.
Traders in interest-rate futures are pricing in a 71% possibility that the Federal Reserve would increase its short-term target rate from 0% to 0.25 percent by the conclusion of its March meeting. According to CME Group statistics, this is up from roughly 32% a month ago, just after Omicron was announced.
Thursday’s commodity markets were mixed. After unrest erupted in Kazakhstan, the benchmark in energy markets, Brent crude futures surged 1.9 percent to $82.31 per barrel. Silver fell 4% to $22.25 per troy ounce, following the trend of precious metals falling as interest rates rise.
Protests in Kazakhstan, which began as a result of increased gasoline costs, have devolved into violence, forcing a Russian-led military alliance to deploy soldiers to the oil-rich nation. Demonstrators attacked government buildings and streets in various locations, as seen on video. Photo credit: Reuters/Mariya Gordeyeva
Joe Wallace can be reached at [email protected]
Dow Jones & Company, Inc. All Rights Reserved. Copyright 2022 Dow Jones & Company, Inc. 87990cbe856818d5eddac44c7b1cdeb8
Frequently Asked Questions
Why are tech stocks sliding?
A: The reason why Tech stocks are sliding is because of the recent tariffs that have been imposed on America by China. This has led to many companies increasing their prices in order to make up for lost profit, and with this increase, consumers will be less likely to purchase these products and cause a larger dip in stock value.
Why are US tech stocks falling?
A: US tech stocks are falling because of economic uncertainty and the US-China trade war.
Why is Amazon stock going down?
A: Amazon stock is going down because the company has a huge debt and cannot afford to grow.
- how is the stock market doing
- us stock market news
- stock market correction coming