Investors retreated from US stocks on Friday, dumping shares of big tech companies and sending the tech-heavy Nasdaq Composite Index plummeting.
Nasdaq fell 2.4% in the early afternoon in New York, its biggest drop in more than two months, as the mixed US jobs report was seen as paving the way for more hawkish monetary policy, which would resulting in tighter and heavier financial conditions. business valuation.
Etsy, Adobe and Tesla were all among the biggest losers on the day, falling more than 5%. Facebook is down more than 2%, losses from its recent peak in early September to more than 20%. The S&P 500 blue-chip index fell about 1.2%.
The sharp drop marked a volatile end to a two-week trading week that was characterized by large price swings between asset classes.
“I believe investors are now expecting monetary policy to turn more hawkish and that has put downward pressure on equities,” said Kristina Hooper, chief global market strategist at Invesco. technology ticket”.
The moves come after a report from the Bureau of Labor Statistics showed the US economy just added 210,000 new jobs last month, less than the 550,000 forecast by economists in a Refinitiv poll.
While the economy added fewer jobs than forecast last month, the unemployment rate still fell to its lowest level since the outbreak of the pandemic. “This is not a weak jobs report,” Hooper said.
For investors, the data opened the door for a faster pace of policy tightening. Federal Reserve Chairman Jay Powell on Tuesday signal his support for a faster reduction in the central bank’s $120 billion-a-month bond purchases. The program has been a key pillar of the stock price’s recovery since the coronavirus crisis last year.
Fund managers want to realize profits at the end of the year and avoid being affected by changes in sentiment.
“The prospect of the Fed turning from friend to foe too quickly leads some traders to think that it is best to withdraw and spend the weekend weighing up the interest paths,” said Max Gokhman, chief investment officer at AlphaTrAI. rate in the future”.
Yields on the 10-year US Treasury note fell 0.07 percentage points to 1.37 percent in early afternoon New York trading. Bond yields are inversely proportional to their prices.
Investors have balanced the more hawkish Federal Reserve on emerging signs of slowing global growth and the potential for the Omicron coronavirus variant to derail the economic recovery.
Germany has moved to impose social restrictions on the unvaccinated, and US president Joe Biden has announced measures to slow the spread of the coronavirus, including stricter testing requirements. stricter for international visitors.
The Stoxx Europe 600 share index fell 0.6% after losing 1.2% in the previous session. London’s FTSE 100 fell 0.1%.
In Asia, Hong Kong’s Hang Seng index closed down 0.1%.
Shares of New York-listed Chinese companies were also under heavy pressure on Friday after ride-hailing app Didi announced plans to delist from the New York Stock Exchange and prepare to list it in New York. Hong Kong.
Shares of Didi fell 17% in US hours. JD.com, Baidu and Pinduoduo all fell about 8%, as did Alibaba.