Tech-Led Wall Street Selloff Sends Dow into Free Fall
A large drop in big tech stocks and mixed economic data hit Wall Street Thursday, butchering all major indices. The Dow had seen a 2.86% fall, while S&P 500 and Nasdaq have shed 3.61% and 4.94%, respectively.
Apple fell nearly 7%, as Microsoft, Amazon, Facebook and Google experienced an over 4% decrease. "No single factor sparked the sell-off, however, this is unlikely to be a repeat of the tech wreck of the late 1990s, given how much the market and sector have changed" Kerry Craig, Global Market Strategist at J.P. Morgan Asset Management commented, adding to worries that the rally had simply gone too far, too fast.
This sudden change, coupled with a sharp rise in volatility further shocked investors, leading them to fall back to safe-haven assets, with the CBOE Volatility index (otherwise known as the fear index), having surged 25% - an almost two-month high.
As a result, Asian stock markets had their worst session in two weeks this morning. MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.6%. Japan’s Nikkei saw a 1% drop, while Hong Kong’s Hang Seng and Australia’s ASX 200 experienced a 1.8% and a 2.8% loss, respectively.
All eyes are now on the US non-farm payrolls, to be released today at 12.30 GMT. A disappointing result could lead to an even larger selloff. Analyst expectations currently stand at 14 million jobs having been created in August.
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