The US stock market tumbled on Wednesday as renewed tech sector anxieties triggered a broad selloff. The Nasdaq Composite sank nearly 2%, while the S&P 500 and Dow Jones Industrial Average also closed lower. Lingering inflation fears, Federal Reserve policy uncertainty, weak earnings forecasts, and geopolitical risks converged to spook investors.
Tech Stocks Lead Market Decline
Major tech giants like Apple (AAPL), Amazon (AMZN), and Microsoft (MSFT) drove the downturn, with chipmakers hit especially hard. Taiwan Semiconductor Manufacturing Co. (TSMC) slashed its revenue outlook, sparking concerns about weakening semiconductor demand. Shares of Nvidia (NVDA), AMD (AMD), and Qualcomm (QCOM) fell sharply in response.
Tesla (TSLA) dropped over 5% on reports of slowing EV demand in China and Europe. Meta Platforms (META) also faced pressure as investors questioned its aggressive AI spending plans.
Rising Bond Yields Add Pressure
The 10-year Treasury yield climbed to its highest level since November, making borrowing more expensive and reducing the appeal of high-growth tech stocks. Investors also wrestled with mixed Fed signals—while inflation remains stubborn, Chair Jerome Powell hinted at potential rate cuts later in 2024.
Geopolitical Risks Intensify
Ongoing US-China trade tensions and Middle East conflicts added to market unease. Supply chain disruptions and potential oil price spikes further dampened investor sentiment.
Is This a Correction or a Deeper Pullback?
Analysts are split on whether the selloff is a short-term correction or the start of a prolonged downturn:
– Bull case: Tech stocks were due for a pause after a strong Q1.
– Bear case: Overvalued tech names may face further declines if earnings weaken.
“Tech has driven this rally, but macroeconomic risks are catching up,” said Priya Mehta, CIO at Horizon Capital. “The sector isn’t bulletproof.”
What Should Investors Watch Next?
- Big Tech earnings (Apple, Amazon, Microsoft updates)
- Fed’s May meeting for clearer rate-cut signals
- Geopolitical developments impacting supply chains
Diversification and selective stock-picking may help navigate ongoing volatility. As one trader noted, “Tech isn’t dead, but it’s on shaky ground.”
