The exact cause of the sale is difficult to decipher, but market watchers have said that after tech stocks performed so well during the pandemic because people were locked in their homes using online services, a decline is to be expected.
“The plunge after the overly exuberant gatherings of recent times was not in itself counterintuitive; but the precise motivation and triggers for market movements remain a puzzle, ”said Riki Ogawa of Mizuho Bank.
Technology, communications services and consumer discretionary stocks fell the most among the S&P’s major sectors. But even after the sudden selloff, tech shares are still way up from where they were a few months ago. Shares of Apple rose 65% for the year and Amazon by 82.3%.
The Zoom videoconferencing app’s share price has increased 460% this year.
The gloom in technology has overshadowed the generally positive numbers on the employment picture, with Canada’s unemployment rate falling to 10.2% while the US rate is even lower at 8.4%.
These new jobs were not enough to convince investors to buy stocks, however.
The Dow Jones Industrial Average and S&P 500 fell about 2% as noon approached, while the tech-focused Nasdaq hurt twice as much, a further 4% after losing 5% on Thursday .
The losses also extended to the Toronto Stock Exchange, where the S & P / TSX Composite Benchmark fell around 300 points or nearly 2%.