At closing bell on Thursday, US stocks had suffered some of their biggest single-day losses in months. The Dow Jones Industrial Average closed at 28,292.73, an 807.77-point loss, and the S&P 500 suffered a 125.78-point loss to close at 3,455.06. Meanwhile, the Nasdaq Composite lost 598.34 points, closing at 11,458.10.
Big losses by tech giants helped drive the stock sell-offs, as Facebook lost more than 4% of its share value, Apple and Microsoft lost nearly 7% each and Amazon and Netflix more than 5% each.
“Someone hit the ‘sell tech, buy dreck’ button and this is creating a bid beneath beleaguered groups, while [tech] gets pummeled,” Adam Crisafulli of Vital Knowledge told CNBC. “For tech specifically, the stocks are seeing large percent declines, but this comes after a massive recent rally. Tech has been untethered from fundamentals for a while and momentum can work in both directions.”
While tech companies have been one of the biggest beneficiaries of the COVID-19 crisis, which caused tens of millions of people to switch to remote working, learning and shopping options, some analysts warned their big boom might be wearing itself out.
“Over the past few months we’ve had really quite a strong recovery, and that has started to stall,” Andrew Hunter, senior US economist at Capital Economics, told the Wall Street Journal.
However, not all economic news was dismal: the US Department of Labor announced on Thursday that about 70,000 fewer unemployment applications than expected had been filed in August - 880,000 instead of 950,000 - but a more widely anticipated jobs report on August is due to be released Friday, which could have an even greater effect on the markets.