May 23, 2022

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Sharp decline in technology stocks: Nasdaq fell nearly 2.5 percent

Sharp decline in technology stocks: Nasdaq fell nearly 2.5 percent

International stock exchanges have responded generally positively US Federal Reserve interest rate decision yesterday. The central bank will reduce its purchases of subsidies faster than previously indicated and allow six interest rate increases over the next two years to beat accelerating inflation. The decision is characterized as a sudden and sharp upward revision of previous estimates.

At the same time, more investors are preparing prolonged disturbances, which is blamed on rising US interest rates, the Omicron infection, the China crises, sanctions, inflation and supply chaos.

Wall Street’s three leading indexes opened Thursday plus, but then moved in different directions. The Nasdaq was down at one point by nearly three percent, but recovered somewhat at the end of the trading day.

This is what it looked like at closing time:

  • The Dow Jones Industrial Average, which is made up of 30 handpicked, supposedly important stocks, fell 0.09 percent.
  • The Nasdaq Composite Index, which is dominated by technology companies, fell 2.47 percent
  • The Standard & Poor’s 500 Index, which consists of 500 of the largest listed companies in the United States, fell 0.88 percent.

high interest rate

Some companies that did well in periods of high interest rates are doing well today, CNBC writes and mentions major banks JPMorgan Chase, Citigroup and Bank of America, all of which are up about three percent.

Others struggle more. The tech-dominated Nasdaq is saddled with Tesla, among other things, which ended up dropping more than five percent. The stock price has fallen dramatically in the past month, among other things, after several divestments from founder and major shareholder Elon Musk.

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Adobe finished more than ten percent lower after the company announced it would do worse than expected this year, while Apple, the world’s largest company by market capitalization, slid 4 percent.

Graphics card maker Nvidia fell 6.8 percent, while stock trading platform Robinhood fell nearly seven percent. Rental company Airbnb also wasn’t having a good day, and ended up with seven percent.

One exception is telecommunications and technology company AT&T, which became one of today’s winners with an increase of about 7 percent. The company was promoted earlier this week by Morgan Stanley from sales to retention.

increase the pace

The US Federal Reserve (Fed) announced Wednesday night Norwegian time that it has decided to cut $ 30 billion from monthly support purchases in the next month, which means that support purchases can gradually end completely in March, in the middle of March. 2022 earlier. This gives some room for maneuver to increase the key policy rate from zero.

The median estimate among Fed Monetary Policy Committee members is now three rate increases in 2022 and three in 2023, and it has appeared in financial forecasts that the bank publishes at the same time as the rate decision. (Conditions)Copyright Dagens Næringsliv AS and/or our suppliers. We would like you to share our cases using a link that leads directly to our pages. All or part of the Content may not be copied or otherwise used with written permission or as permitted by law. For additional terms look here.