Several stock trades on Wall Street sank on Tuesday morning, as fears about the future successes of tech markets and declining retail sales worried investors.
The Dow Jones Industrial Average fell by more than 500 points. Other market indicators were also lowered, with the S&P 500 dipping by 1.8 percent and the Nasdaq Composite dropping by 2.3 percent, according to reporting from CNBC. Stock market gains made for the year up to this point were virtually nonexistent, erased following Tuesday morning’s slide.
Much of the blame centered on two factors: continued losses for the tech industry as well as declining sales for retailers.
Target suffered huge losses on Tuesday, losing 9.2 percent of its stock pricing after a weak report on earnings was released from the company for the previous quarter. Other retailers also suffered losses, including Kohl’s which saw its stock drop by 9.7 percent, and L Brands which went down by 14.7 percent. Macy’s was down by a comparatively modest 5 percent.
Stocks continued to dwindle for the so-called “FAANG” companies — Facebook, Amazon, Apple, Netflix, and Alphabet. On Tuesday, Facebook’s losses were 0.9 percent, while Amazon, Apple, and Netflix took hits of around 3 percent declines in their stock offerings.
FAANG losses on Tuesday were a continued trend for recent outcomes of these companies. Collectively, these companies have lost $1 trillion in market value since their respective 52-week highs were recorded.
Breaking News: A stock market sell-off extended into a second day, erasing Wall Street’s gains for the year as technology shares continued their slide https://t.co/zSVeBJE3x3— The New York Times (@nytimes) November 20, 2018
Many investors suggested that FAANG companies were within a “bear market” slide — a period of declining prices and pessimism, versus a “bull market” where prices increase and companies are generally optimistic. Less clear was whether the market overall was in a bear or bull market, as a recovery later this week could make the overall outlook on the market seem relatively sound.
What is driving losses in tech? Investors say it’s got a lot to do with trade wars initiated by President Donald Trump, according to reporting from the Street.
“Trade war concerns with China weigh on the global supply chain for large technology companies while global growth fears worry many that future earnings will be lower,” said Chris Zaccarelli, chief investment officer for the Independent Advisor Alliance.
The president has suggested other factors in the past as possibly hurting the market, including suggesting that changes in the political landscape would lead to worse outcomes. Before the midterm elections, Trump made what many considered dubious predictions regarding a drop in stock market prices if Democrats won one or both houses of Congress, following a separate drop in Wall Street at the time.
“Stock market slump at that time was also due to slump in tech and worries about the future of such companies,” Trump said in a tweet before the elections took place, per the previous reporting from the Inquisitr.
During that time, however, investors again suggested that trade wars and declining tech shares were to blame for the losses, not the prospects of a Democratic-run Congress.