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Tech stocks tumble as global markets cool off, greenback weakens

Martin Young

Stock markets in the U.S. and across the globe have started to cool off this week as economic and geopolitical tensions still weigh heavily. Automaker Tesla has bucked the trend, however, posting another all-time high share price.

The three major U.S. indices ended the day lower on Thursday, with the S&P 500 and Nasdaq both posting their largest declines in four weeks. Tech stocks, which have been on fire recently, have started to see selloffs as traders take profits off the table.

The S&P 500 lost 2% yesterday in a fall to 3219 points at the time of writing, while Dow Jones Futures also slumped early Friday following recent highs.

Chart –

Tech stocks were largely responsible for the declines with Apple, Microsoft, Google’s Alphabet, Intel, and Amazon all losing ground following strong rallies in the wake of the March Covid-crash. CNBC’s Jim Cramer noted the correlations stating;

“All these Big Tech stocks trade together, and when you kick off earnings season with such disappointing action, well, it doesn’t bode well for the rest of the group,”

Automaker Tesla has bucked the trend with an all-time high in stock price as it spiked to a peak of $1,677 on Thursday, before pulling back with its tech brethren.

Chart – nasdaq

The surge came on the back of second-quarter earnings which beat analyst expectations, with Tesla saying it still planned to deliver more than 500,000 new vehicles by the end of 2020.

New American jobless claims came in at about 1.42 million, higher than the 1.3 million reported for the previous week. This has added to the economic pressure alongside escalating tensions between the U.S. and China.

Chinese stocks also extended losses late this week, with other Asia Pacific markets moving lower on geopolitical tensions according to CNBC. Markets in Australia, South Korea, Hong Kong, and Thailand were down during Friday trading while Japan’s benchmark Nikkei 225 was closed.

Forex Update

The global reserve currency, USD, also weakened this week amid a selloff that was beneficial for most major pairs. Embassy closure battles between China and the U.S. have increased pressure on the greenback in the world of forex.

Cable has made ground on the week but has remained largely unchanged over the past few days at $1.273 as Brexit woes continue to hamper the British currency.

Chart –

The Euro pair has posted a similar chart on the week, climbing to $1.159. EUR/USD reached its highest level since 2018 at $1.162 this week.

Currencies in Asia remained largely muted against the greenback this week as markets there also weakened.

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