More sharp declines in Big Tech stocks sent the Nasdaq composite down 4% Tuesday, the worst drop for the tech-heavy index since September 2020. The Nasdaq is now down 20% so far this year as investors shun the ultra-pricey tech sector, which had made gangbuster gains for much of the pandemic. With interest rates set to rise as the Federal Reserve steps up its inflation fight, traders are less and less willing to pay the lofty prices they had been paying for Microsoft, Facebook’s parent company, and other tech giants. The S&P 500 fell 120.92 points, or 2.8%, to 4,175.20. The Dow Jones Industrial Average fell 809.28 points, or 2.4%, to 33,240.18.
The slide for major indexes follows a mostly weak day on Monday that turned into a late rally, partially led by technology stocks after Twitter agreed to sell itself to Tesla CEO Elon Musk. The social media company fell 3.9% Tuesday, while Tesla slumped 12.2% over concerns that Musk will be distracted and less engaged in running the electric vehicle maker, the AP reports. Microsoft and Apple both dropped 3.7%. Both companies will report their latest financial results later Tuesday. Google parent Alphabet fell 3.6% and Facebook parent Meta shed 3.2%.
Retailers and other companies that rely on direct consumer spending also fell broadly. General Motors, which also reports its latest results later Tuesday, slipped 4.5%. Nike fell 5.8%. General Electric fell 10.3% for one of the sharpest losses on the market after telling investors that inflation and other pressures are weighing on its profit forecast for the year. Energy companies gained ground along with a 3% rise in US crude oil prices. Earnings remain a key focus of Wall Street for the rest of the week. Boeing reports its results on Wednesday, along with Meta.
(Read more stock market