Soaring tech stocks hit all kinds of milestones as they led a market resurgence. Now comes a milestone of the opposite variety: CNBC reports that the biggest companies in the sector have lost a combined $1 trillion in value in just the last three days of trading. Apple has fared the worst, down $220 billion, but other big names are not far behind, including Tesla ($199 billion), Microsoft ($189 billion), and Amazon ($173 billion). Facebook parent company Meta shed $70 billion. The overall market—as reflected in the Dow and the benchmark S&P 500—also has seen steep losses in the wake of the Fed's decision to aggressively jack interest rates, but the tech sector—as reflected in the Nasdaq—has been hit hardest of all.
Taking a bigger-picture view, the Wall Street Journal notes that "a cocktail of geopolitical risks and economic headwinds is posing the biggest threat to global growth in years and rattling markets." The story quotes analyst Seema Shah of Principal Global Investors, who worries the Fed will struggle to get its much-wanted "soft landing" just right as it tries to tame inflation. "By 2023 you are very likely to see growth slowing very significantly, and the specter of recessions is really starting to loom."
Markets, including the Nasdaq, were poised to open Tuesday back in positive territory and snap their three-day slide. But the overall downward trajectory is not expected to end anytime soon. “In the history of bubbles, you’ve never seen a bubble resolve itself with a swift 20% to 30% correction, and then you’re off to the races again,” Dan Suzuki of Richard Bernstein Advisors tells Bloomberg. “Bubbles pervade society and it takes a long time for people to realize that the investments are not going to live up to their unrealistic expectations.” (Read more tech industry stories.)