Stocks Rocked by Late-Week Swoon in Tech Giants
A selloff in the world’s largest technology companies hit stocks in the final stretch of a stellar year.
In another session of slim trading volume — which tends to amplify moves — the S&P 500 lost 1.1% and the Nasdaq 100 slipped 1.4%. While every major industry succumbed to Friday’s slide, tech megacaps bore the brunt of the selling. That’s after a torrid surge that saw the group dubbed “Magnificent Seven” account for more than half of the US equity benchmark’s performance in 2024.
The S&P 500 and the Nasdaq 100 trimmed this week’s gains. The Dow Jones Industrial Average slipped 0.8%. A gauge of the “Magnificent Seven” shares sank 2%, led by losses in Tesla Inc. and Nvidia Corp. The Russell 2000 index of small caps dropped 1.6%.
Funds tied to several of the major themes that have driven markets and fund flows over the past three years stumbled during the week ending Dec. 25, according to data compiled by EPFR.
Redemptions from cryptocurrency funds hit a record high while technology sector funds extended their longest outflow streak since the first week of 2023, the firm said.
This year’s rally in US equities has driven the expectations for stocks so high that it may turn out to be the biggest hurdle for further gains in the new year. And the bar is even higher for tech stocks, given their massive surge in 2024.
A Bloomberg Intelligence analysis recently found that analysts estimate a nearly 30% earnings growth for the sector next year, but tech’s market-cap share of the S&P 500 index implies closer to 40% growth expectations may be embedded in the stocks.
The S&P 500 fell 1.1% as of 4 p.m. New York time
The Nasdaq 100 fell 1.4%
The Dow Jones Industrial Average fell 0.8%
Source : Bloomberg
