The bleeding that started at the beginning of 2022 apparently continued to end the worst quarter since the Pandemic began in 2020. The tech selloff reverberated throughout Wall Street where $1.99 billion of value has been subtracted from the Nasdaq Composite index.
Broad-based indexes lost $1 trillion of value but fared better than the Nasdaq index. Investors kept punishing the Pandemic darlings dragging the indexes with them.
A sea of red
President Biden claimed on Thursday 31st of March that the USA is preparing to release record reserves of oil to fight the soaring energy prices and inflation. As a result, the S&P 500 fell by 1.6%, Nasdaq by 1.5%, and Dow Jones by 1.6%.
The 10-year Treasury yield lowered to 2.32% but its performance this quarter is up, recording the largest since March 2021. As a general rule yields fall when prices rise, as government bonds underperform in times of high inflation.
Consumer spending in the U.S. rose by 0.2% in February which is most likely due to higher prices but it still came in below forecasts. Amid a tighter labor market, the expectations are mostly in line with economists’ predictions. Stoxx Europe 600 also finished down by 0.9% followed by Asian indices also finishing lower on the day.
The U.S. large-cap tech stocks finished low for the day but were not alone in their fall. Almost the entire market bled as investors locked in profits. There is a lot to digest for the market therefore it is expected that some volatility will most likely happen.
Frothy markets usually cause investors to panic sell with more recent geopolitical tensions adding to the worries investors feel. Currently, supply chains are stretched whilst inflation is on the rise which is clearly reflected in this quarter’s performance of the market indexes.
Investors should keep an eye on their portfolios, tracking changes in company policies, reporting, and general sentiment. The investment thesis for long-term investors should not change based on current issues, however, keeping track of developments certainly can help understand the broader market forces.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.