Amazon CEO Andy Jesse spoke at the GeekWire Summit in Seattle on October 5, 2021.

David Ryder Bloomberg | Getty Images

Cloud companies, e-retailers and household technology names were hit on Thursday, erasing hundreds of billions of dollars in market value and pushing the Nasdaq Composite to its worst one-day decline since June 2020.

A day after the Federal Reserve raised its key interest rate by half a point in a bid to stem rising inflation, investors sold the market share, which is commonly seen as the engine of growth, amid fears the economy is dark.

Big Tech went through a huge sell-off, with Amazon down nearly 8 percent and Facebook owner Meta Platforms down about 7 percent. Among other big names: Apple fell nearly 6%; Google’s parent Alphabet decreased by about 5%; and Microsoft shares fell 4%. Overall, the Nasdaq fell 5%.

Investors were particularly keen on e-commerce after Shopify, which grew during the pandemic by helping physical retailers go digital, reported disappointing first-quarter profits and earnings. Shares fell 15%. Ebay and Etsy also suffered double-digit declines after their earnings reports.

Technology replacement began in late 2021 as rising inflation and the threat of rising interest rates have led investors to areas of the economy that are considered safer, such as energy and financial services. An additional blow came with Russia’s invasion of Ukraine in February, which boosted energy prices and heightened concerns about supply chain constraints and weakening business conditions in many parts of the world.

The first quarter of the year was the worst period for the Nasdaq of the same three months in 2020, when the first days of the pandemic caused an economic halt. The technology index fell 9.1% in the first quarter. Less than half of the second quarter, the Nasdaq is already down 21% for the year.

Cloud stocks, which also became a favorite during Covid as corporations used services they could use remotely, were also hit hard on Thursday. Bill payment software developer Bill.com noted that shares fell 13%, while shares of software project management company Asana fell 11%.

The WisdomTree cloud computing fund fell nearly 8%, its steepest daily decline since September 2020.

Covid winners are crushed

CNBC

For some Covid winners such as Netflix, Zoom, Peloton and Twilio, the turnaround was even more dramatic than expected. Each of them has decreased by more than 45% so far, and their decline deepened on Thursday.

The market initially responded positively to the Fed’s comment on Wednesday, after chairman Jerome Powell said the Federal Open Market Committee was not considering actively raising interest rates by more than half a point. However, the prospect of a further rise in interest rates led to negative sentiment on Thursday, sending shares down everywhere.

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https://www.cnbc.com/2022/05/05/tech-selloff-puts-nasdaq-on-pace-for-worst-day-since-june-2020.html

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