Investing
Nasdaq 100 Set to Lose Over $1 Trillion as Tech Selloff Deepens, SpaceX Falls
The Nasdaq 100 was headed for a loss of more than $1 trillion in market value on Tuesday, due to broad technology selloff. SpaceX valuation slipped beneath $2 trillion and major chipmakers and tech giants including Apple sunk deeper into steep declines.
Technology stocks fell Tuesday, pushing the Nasdaq 100 to lose more than $1 trillion in market value and sending SpaceX below $2 trillion for the first time since it went public.
SpaceX, set to enter the Nasdaq 100, has fallen $600 billion in market value in three trading days. The firm’s market cap would be under $1.95 trillion if losses are held constant.
Shares of aerospace and technology companies were down more than 3.6% at $149.1 in premarket trading on Tuesday. Shares were currently 9% higher than $135, where it debuted as a public company.
The futures of the Nasdaq 100 were down 2.5%, indicating an opening drop of more than 700 points. This 2.79% fall would result in a $1.15 trillion loss in the market cap for the index as per calculations.
Chipmakers Lead Market Declines
Many of the hardest hit were semiconductor stocks, which had been among the biggest beneficiaries of this year’s artificial intelligence boom. Intel was down 5.2% and Advanced Micro Devices dropped 5.2%,
Memory chipmakers were under pressure too. Micron Technology lost 8%. SanDisk dropped 9.2%, and Western Digital gave up 7.5%. South Korean memory chip stocks also fell sharply, including a sharp decline.
Fears Over AI Spending Plague Big Tech
The selloff also hit six of the seven stocks in Wall Street’s “Magnificent Seven” group, as investors questioned whether enormous outlay on AI infrastructure will pay off soon enough to justify the prices.
Shares of Alphabet fell 2.1%, Amazon 1%, Tesla 3%, Nvidia 3% and Apple 0.4%. Collectively these companies were on track to wipe out roughly $345 billion in market value if the losses held.
Investor sentiment was also pressured because of the worry that the US Federal Reserve may continue with interest rate hikes. Traders are now expecting a 50-bp rate hike from the Fed by December according to CME Group’s FedWatch Tool.
The bets have shifted significantly higher from the view just two weeks ago of a single 25-basis-point-rate hike, as markets adjust to a hawkish policy outlook under new Federal Reserve Chair Kevin Warsh.
Source: Reuters
Follow Inspirepreneur Magazine for daily global business news.