Stocks slumped on Friday and hit new lows for 2022, capping off a brutal sell-off this month as investors continued to dump tech stocks amid ongoing uncertainty surrounding an economic slowdown caused by rising inflation. and the prospect of aggressive interest rate increases.
The Dow Jones Industrial Average fell 2.8%, more than 900 points, while the S&P 500 lost 3.6% and the tech-heavy Nasdaq Composite 4.2%.
The Nasdaq posted its worst month since October 2008, falling about 15%, as tech stocks were among the hardest hit by the sell-off in recent weeks.
Both the Nasdaq and the S&P 500 (down nearly 9% this month) hit new 2022 lows as investors continue to face a host of uncertainties, from the Federal Reserve’s upcoming interest rate hikes and rising inflation to the cases of Covid-19 in China and the current war in Ukraine.
Shares of tech giant Amazon became the latest to fall after first-quarter earnings were weaker than expected: the shares plunged 14% on Friday after disappointing results.
Shares of other tech stocks also fell, with Intel and Apple falling 7% and nearly 4%, respectively, amid gloomy prospects that spooked investors.
Earnings season so far has been mixed. Major companies that have reported lackluster results in recent days, such as Netflix, Alphabet and Amazon, have seen big sell-offs. Of the 275 S&P 500 companies that have reported first-quarter earnings so far, about 80% have beat analyst expectations, according to Refinitiv data.
“Disappointing guidance from tech giants Amazon and Apple has exacerbated concerns that a decidedly more aggressive Fed, coupled with still-intractable supply chain problems, and rising energy prices may make hope of a ‘soft landing’ from the Fed more elusive”. says Quincy Krosby, chief equity strategist at LPL Financial.
Shares of electric vehicle maker Tesla fell 0.8% on Friday after billionaire CEO Elon Musk sold another 5.2 million shares this week. He has now sold more than $8 billion worth of Tesla stock in recent days as he looks to finance his $44 billion acquisition of social media company Twitter.
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