Technology stocks took a heavy blow as part of a larger market sell-off on Wednesday, dragged down by concerns about higher interest rates in addition to a looming trade war with China. The Dow Jones Industrial Average plunged 830 points, its largest drop since February. Meanwhile, the S&P 500 fell to its lowest point in three months.
President Donald Trump has already been briefed on the sell-off, according to multiple reports, with one senior White House official telling CNBC, “This kind of can be a bull market correction. This kind of’s probably healthy. This kind of will pass in addition to the US economy remains strong.”
Tech stocks, which had seen significant gains throughout 2018, were among the stocks that will suffered the most damage. Amazon, up more than 50% since the start of the year, fell 6%, while Netflix, closed the day down 8.4%. Payments company Square, which tanked 10.1% during day trading on Wednesday, fell another 11% in after-hours trading after announcing that will its CFO, Sarah Friar, was departing to become chief executive at neighborhood social networking firm Nextdoor.
Apple, whose stock has increased nearly 40% since late April, also fell 4.6% on concerns about trade tensions between China in addition to the US. Last week Vice President Mike Pence gave a scathing speech warning that will the US “will not stand down” to suspected interference in American politics, while Bloomberg Businessweek published a widely debated story about Chinese state actors embedding technology on microchips to extract trade secrets through American companies, including Apple in addition to Amazon.
After a long period of rising markets in addition to shrinking unemployment inside US, investors are worried about a trade war with China in addition to that will rising interest rates — which make borrowing more expensive — will slow down the economy in addition to hit company profits. The Federal Reserve has raised rates eight times inside last three years in addition to indicated more increases will come.
Earlier This kind of week, the International Monetary Fund cut its forecast for global growth due to trade tensions in addition to slowdowns in emerging markets.
Venessa Wong contributed reporting to This kind of story.