Stocks fall despite Fed intervention, dragging tech shares down once again
On a day that saw the U.S. Federal Reserve try to flip the only switch it can to light up investor confidence, investors remained unconvinced of the short-term financial prospects of the U.S. and global economies.
All three major indices saw red on Tuesday after a sharp Monday rally partially erased their historically bad week that came before. The see-saw of domestic equities continued for yet another day.
In contrast to yesterday’s sharp gains on slim positive news, today’s declines came on the back of that surprise Fed rate cut of 50 basis points — the first such unexpected reduction since the 2008 financial crisis.
I’m no expert, but it would appear that the rate cuts aren’t having the intended effect.
— Aaron Levie (@levie) March 3, 2020
While it’s nice of the Fed to ease some during a period of uncertainty, the fact that it is cutting rates so sharply ahead of the market’s timing expectation implies that things could be worse than previously thought.
There are a host of reasons for investor pessimism. Airline travel and the attendant business spending that goes with it is being sharply curtailed by fears of spreading the COVID-19 coronavirus. No one knows the extent to which supply chain disruptions in China in the first quarter will impact supplies in the second quarter. And the U.S. has yet to fully reckon with the coronavirus’ spread nor does it have a good handle on the extent of the virus’ spread within the U.S.
A true cause may be unknowable, but the effect was that stocks got whacked. Here’s the butcher’s bill:
- Dow Jones Industrial Average: -789.37, or 2.96%
- S&P 500: -86.86, or -2.81%
- Nasdaq Composite: -268.08, or -2.99%
The anti-stonking hit tech’s largest players as well, with Apple falling over 3%, Microsoft falling 4.8%, Alphabet, slipping 3.4%, Amazon falling a more modest 2.3%, and Facebook slipping the most with a 5.4% decline during regular hours.
SaaS stocks too things particularly hard, off nearly 4% a few hours before closing, the Bessemer cloud and SaaS index wrapped the day off 2.9% as well. Some companies didn’t take too much damage. Slack lost about a point, and Uber recovered all losses on the day to post a gain.
What could bring about a slowdown to volatility isn’t clear.
This recent market turbulence is not stopping some companies from filing to go public — we’ve seen construction software firm Procore file, along with venture-backed Accolade, just in the last week.
On a day that saw the U.S. Federal Reserve try to flip the only switch it can to light up investor confidence, investors remained unconvinced of the short-term financial prospects of the U.S. and global economies. All three major indices saw red on Tuesday after a sharp Monday rally partially…
Recent Posts
- ICYMI: the week’s 7 biggest tech stories, from Netflix enraging users to the Rabbit R1 disappointing all of us
- Samsung’s archrival strikes crucial partnership with Nvidia’s closest ally to deliver key next-gen memory — SK Hynix teams up with TSMC to advance HBM development but could this move encourage TSMC to become like Intel?
- As Google’s antitrust trial wraps, DOJ seeks sanctions over missing messages
- Microsoft needs some time to ‘refine’ updates for Copilot AI in Windows
- Sony Xperia 1 VI leak reveals new camera app and more features borrowed from Alpha cameras
Archives
- May 2024
- April 2024
- March 2024
- February 2024
- January 2024
- December 2023
- November 2023
- October 2023
- September 2023
- August 2023
- July 2023
- June 2023
- May 2023
- April 2023
- March 2023
- February 2023
- January 2023
- December 2022
- November 2022
- October 2022
- September 2022
- August 2022
- July 2022
- June 2022
- May 2022
- April 2022
- March 2022
- February 2022
- January 2022
- December 2021
- November 2021
- October 2021
- September 2021
- August 2021
- July 2021
- June 2021
- May 2021
- April 2021
- March 2021
- February 2021
- January 2021
- December 2020
- November 2020
- October 2020
- September 2020
- August 2020
- July 2020
- June 2020
- May 2020
- April 2020
- March 2020
- February 2020
- January 2020
- December 2019
- November 2019
- December 2011