- US stocks tumbled Wednesday after the Chinese tech giant Tencent reported its first profit decline in almost 13 years, putting pressure on the US tech sector.
- Investors are watching tech especially closely for signs of a growth slowdown after Facebook said it had peaked for the year during a disastrous earnings report.
- Follow the tech-heavy Nasdaq 100 index.
USstockstumbled Wednesday after the Chinese tech giant Tencent reported its first profit decline in almost 13 years, putting pressure on the mega-cap US tech firms that have led the market higher in recent months.
Tencent’s earnings shock is most likely reminding investors of Facebook’s similarly jarring quarterly report from late July, when the company missed revenue targets and predicted slowing future growth.
That disaster wound up costing Facebook $US120 billion in market value in a single day – the biggest wipeout in US stock-market history.
The broader issue at hand is the perception that the mega-cap tech juggernauts so responsible for the market’s climb to near-record levels are becoming vulnerable. When doubts emerge over their ability to keep growing at such a fast pace, it can result in sharp selling.
Shares of raw-material producers also dropped as copper fell into a bear market. Commodities are down across the board as the emerging-market currency crisis continues to wreak havoc.
The tech-heavy Nasdaq 100 led market-wide losses in the US, dropping as much as 1.9% at its intraday low. The Dow Jones industrial average fell as much as 1.3% – or 334 points – while the benchmark S&P 500 slipped 1.3% at its daily low.
The NYSE Fang+ Index, which contains 10 of tech’s heaviest hitters worldwide, fell more than 2.8%. Here’s the damage, listed in decreasing order of losses.
- Netflix (-4.4%)
- Tesla (-3.9%)
- Alibaba (-3.5%)
- Twitter (-3.4%)
- Facebook (-2.5%)
- Baidu (-2.2%)
- Alphabet (-2%)
- Amazon (-1.6%)
- Nvidia (-1.6%)
- Apple (-0.5%)
Raw-material manufacturers in the S&P 500 also declined more than 2% on Wednesday. Twenty-three of the 24 companies in the sector fell on the day, led by Freeport McMoRan (-9.1%) and Newmont Mining (-5.6%).
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