The six largest U.S. tech companies suffered a crushing loss of more than $500 billion in value yesterday, i.e. Tuesday, after an unexpectedly high August inflation report sent tech stocks tumbling.
The Nasdaq Composite dropped 5.16% to end the day at 11,633.5, steeper than any day since June 2020. The Dow Jones Industrial Average fell 1,276.37 points, or 3.94%, to close at 31,104.97, and the S&P 500 was no exception, with a 4.32% drop to 3,932.69, as per a CNBC report.
The Invesco QQQ ETF, an exchange-traded fund tracking the 100 most highly valued non-financial companies listed on Nasdaq, suffered a 5.5% decline in its worst trading day since March 2020. The fund’s top 10 holdings include tech giants Microsoft, Apple, Amazon, Alphabet, Meta and Nvidia.
As per the report, these companies posted some of the biggest losses:
Apple lost $154.11 billion in market cap and fell 5.87%, suffering its steepest drop since September 2020.
Microsoft lost $109.33 billion and dropped 5.5%, its steepest drop since September 2020.
Google parent Alphabet lost $85.32 billion and fell 5.9%, its steepest drop since March 2020
Amazon lost $98.11 billion and fell 7.06%, its steepest fall since May 2022.
Meta (formerly Facebook) lost $42.55 billion and tumbled 9.37%, its steepest drop since February 2022.
Nvidia lost $34.21 billion and was down 9.47%, its steepest fall since March 2020.
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The August inflation report is one of the last that the Federal Reserve System (US’ central bank) will see ahead of their September 20 - September 21 meeting, where the central bank is expected to deliver their third consecutive 0.75 percentage point interest rate hike to tamp down inflation. The report could lead the bank to continue its aggressive hikes longer than some investors anticipated.
Even as gas prices fell, the August consumer price index report showed a higher-than-expected reading for inflation. Headline inflation rose 0.1% month over month, whereas core inflation rose 0.6% month over month. On a year-over-year basis, inflation was 8.3%, as per the report, further stating that economists surveyed by Dow Jones had been expecting a decline of 0.1% for overall inflation, with a rise of 0.3% for core inflation.
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