Investors changed their stance on once-favorite technology firms over fears about the economy, sending US markets into a tailspin in April.
The Nasdaq index fell more than 4% on Friday due to a sell-off in Amazon shares after the company announced a drop in online sales.
With a 13 percent drop in April, the tech-heavy index had its worst month since the 2008 financial crisis.
However, the market slump isn’t only affecting tech equities.
The S&P 500 as a whole saw its worst one-day drop since June 2020. It has dropped about 14% since the beginning of the year.
In April, the Dow Jones Industrials plummeted 5%, bringing its total loss to over 10% since January.
Markets, which are typically used to forecast future economic health, have been anxious as economic dangers have grown.
Higher oil costs and the crisis in Ukraine are driving inflation in the United States and others to multi-decade highs.
Both the conflict and the ongoing effect of the Covid epidemic have had an impact on key supply chains, particularly in China, where sometimes lockdowns are still being utilized to keep the virus from spreading.
Apple has previously said that disruption in China would have a significant impact on its company.
And Amazon, which benefited from the pandemic surge in home delivery demand, has seen that the impact is starting to dissipate. Amazon’s stock plunged 14% on Friday after the company revealed lower internet sales and its second quarterly basis loss since 2015. Etsy, a smaller online marketplace, saw its stock drop by more than 8%.
“Market players are anxious to begin with, so when there’s any uncertainty, there’s a rapid trigger when it comes to these names,” said Keith Buchanan, senior level portfolio manager at Globalt stock investments in Atlanta.
“There’s clearly a’shoot first, ask questions later’ mindset when projections about these organizations’ development fail to materialize.”
While consumer spending, which is the major engine of the US economy, has held so far, there are increasing concerns that rising prices may cause buyers to be more cautious, leading to a recession.
The US economy shrank by 0.4 percent in the first three months of the year, according to data released earlier this week. The European Union reported just 0.2 percent growth over the period on Friday.
