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After a recent technology-led selloff, US stocks of big tech brands suffered significant decline at their last trading session, pausing Wednesday’s rebound, after a recent technology-led selloff.
The tech-heavy Nasdaq Composite Index plunged by 1.99%, to close at 10919.59 points, and the S&P 500 fell lost 1.76%, to close at 3339.19 points, marking the first time since March, that both indexes had a drop for the fourth time in five days.
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The Dow Jones Industrial Average closed down 1.45%, to 27534.58 points.
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What it means: As COVID-19 cases continue to rise, it should be noted that US consumer spending is a massive downside risk for equity markets. With services making up around two-thirds of overall spending, the recovery in this part of the economy is crucial, if the US economy hopes to finish the year strongly.
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Stephen Innes, Chief Global Market Strategist, AxiCorp, in a note to Nairametrics, spoke on the prevailing macros at the world’s largest equity market. He said,
“US stocks reversed course and fell for the fourth day in five, spurred by a fresh tech sell-off. The S&P 500 declined 1.8%, and the Nasdaq, where volatility has prevailed for over a week, lost 2%. Energy shares plunged as oil dropped back toward $37. Asian stocks looked most certainly set to drop. Treasuries rose with the dollar. Weaker sentiment returned after US democrats voted to block stimulus legislation worth around $500 billion put forward by Senate Republicans, arguing the package was too small. Perhaps unsurprisingly, given the $3 trillion passed by house democrats in May.”
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The market remains deeply scarred from the tech rout, which in no small part has kept the wall of money sidelined.
