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.
The Dow Jones Industrial Average closed down 1.45%, to 27534.58 points.
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.
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.”
The market remains deeply scarred from the tech rout, which in no small part has kept the wall of money sidelined.