In Wednesday’s trading session, the technology sector looked like it would shake off Japan’s Black Monday. As the day wore on, selling momentum accelerated. Nasdaq fell by 1.1%, pulling the Dow and S&P 500 (IVV) lower.
Investors demonstrated weak demand for the 10-year U.S. Treasury. This may hint at further a credit crunch event sometime in the future. Fearful of stocks falling more in the days ahead, investors dumped shares of Walt Disney (DIS), Super Micro Computer (SMCI), Dell Technologies (DELL), Nvidia (NVDA), Broadcom (AVGO), and Tesla (TSLA).
Lesser followed tech names like NXP Semiconductor (NXPI), Microchip Technology (MCHP), and Cadence Design Systems fell.
Earlier yesterday, the Bank of Japan Deputy Governor Shinichi Uchida tried to calm markets. The Governor said that the central bank will pause its rate hikes whenever financial markets are unstable.
Markets are in a “risk off” mode. They are unwilling to take speculative bets on expensive stocks. Markets already reacted poorly to strong quarterly results from Apple (AAPL), Amazon (AMZN), Microsoft (MSFT), and Alphabet (GOOG).
Speculators are selling shares when companies post good news.
Stay Invested
Investors who bought positions at low prices need not panic. The market may fall or trade in a range in the near term. In the long term, stocks trend upward, especially those that have growth potential valued at low price multiples.
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