Tech stocks continue to be bogged down

Nasdaq is down 3.8% this week, marking the 7th consecutive week. This is the longest streak of declines for the index tied to technology businesses in 21 years.

Inflation, rising interest rates, the war in Ukraine and the Covid-19 lockdown in China have made for a “disastrous” and particularly stressful market for investors in technology and growth stocks. private. The US Federal Reserve (FED) signaled it will continue to raise interest rates to combat inflation, leading to concerns that higher capital costs will combine with dwindling consumer confidence to erode profit margins.

Since peaking on November 19, 2021, Nasdaq has dropped more than 29%, closing May 20 at 11,354.62 points. The S&P 500, though not yet badly damaged, hit the border of a “bear market” on the same day, meaning a 20% drop from its peak.

Cisco was among the tech companies’ biggest losers this week, falling 13% after the giant forecast an unexpected second-quarter drop in revenue. Once seen as an indicator of the economy given its popularity among businesses, Cisco says its forecast is based on shutdowns in Russia and Belarus, plus supply disruptions due to lockdowns. Covid-19 in China and uncertainty about when things will improve.

“Given this uncertainty, we are being realistic about the current environment and cautious about our outlook on a quarterly basis.”

Shares of Dell, which announced results on May 19, fell more than 11% for the week. Shopify, which specializes in selling software to retailers, is down nearly 10%. Cloud software company Workday fell about 9%, and security software maker Okta fell 14%.

Shares associated with billionaire Elon Musk also did not escape the decline. Twitter, the social network that is in the process of selling itself to Musk, fell 6% to $38.29. Tesla shares fell 14%.

Among the Big Tech, Apple fell 6.5%, down for the 8th straight week. Alphabet is down 6% and Amazon is down 5%.

Du Lam (According to CNBC)