[New York Stock Market] Big Tech Sell-off Amid Economic and Earnings Concerns... Nasdaq Plummets 3.95%

[Asia Economy New York=Special Correspondent Joselgina] Major indices of the U.S. New York stock market closed lower on the 26th (local time) amid growing selling pressure due to caution ahead of earnings announcements from large technology companies and concerns over economic slowdown. The tech-heavy Nasdaq index fell nearly 4% compared to the previous session despite a decline in Treasury yields. It is down about 22% from its previous peak.

On this day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 33,240.18, down 809.28 points (2.38%) from the previous session. The large-cap S&P 500 index ended at 4,175.20, down 120.92 points (2.81%), and the tech-focused Nasdaq index closed at 12,490.74, down 514.11 points (3.95%). The small-cap Russell 2000 index also finished lower at 1,890.47, down 63.73 points (3.26%).

Investors focused on first-quarter corporate earnings and concerns over economic slowdown due to China's COVID-19 lockdowns.

In particular, earnings announcements from major tech companies such as Microsoft and Alphabet were scheduled after the market close, raising caution that the earlier 'Netflix shock' could be repeated, especially among tech stocks. Microsoft and Alphabet closed down 3.74% and 3.59%, respectively, compared to the previous session. Meta, Facebook's parent company (-3.23%), Apple (-3.73%), and Netflix (-5.48%) also slid consecutively.

Tesla plunged more than 12% following news the previous day about CEO Elon Musk's acquisition of Twitter. This was due to concerns that Musk might sell Tesla shares to finance the Twitter purchase. Twitter's stock, which Musk agreed to acquire, also fell nearly 4%. Chip stocks such as Nvidia (-5.60%) and AMD (-6.10%) recorded significant declines.

Chris Senek of Wolfe Research stated, "The recent strength of big tech will collapse once the overall economy slows and fundamentals begin to deteriorate to a meaningful degree."

Despite UPS's earnings beating expectations before the market opened, its stock fell 3.48%. General Electric (GE) announced that supply chain disruptions would pressure earnings, causing its stock to plunge more than 10%. Universal Health Services also dropped nearly 10% after reporting a 27% year-over-year decline in first-quarter revenue.

On the other hand, Arch Resources closed up 20.95% after reporting earnings that exceeded expectations before the market opened. After the market close, Microsoft, Alphabet (Google's parent company), General Motors, and Visa are scheduled to announce their first-quarter earnings.

China's recent COVID-19 lockdown measures are adding further pressure to the market. The Ukraine war, high inflation in the U.S., and the resulting acceleration of central bank tightening are also cited as factors raising concerns about economic slowdown. Peter Bookba, Chief Investment Officer at Blickley Advisory Group, said, "There are many concerns about economic growth."

In the bond market, the U.S. 10-year Treasury yield briefly fell to 2.72% during the session. Treasury prices move inversely to yields. The 10-year yield, which had been approaching 3% amid recent gains, was trading around 2.74% in the afternoon. Typically, falling yields are positive for interest rate-sensitive tech stocks, but on this day, attention was more focused on earnings announcements, limiting the impact.

Hani Redha, portfolio manager at Pinebridge Investments, said, "Over the past 18 months, we saw a beautiful scenario of accelerating growth and falling Treasury yields?a perfect combination for risk assets. Now, it's completely the opposite." Since April, the S&P 500 has fallen about 7%, the Nasdaq about 11%, and the Dow about 3%.

Oil prices rose despite China's COVID-19 lockdown measures. On the New York Mercantile Exchange, June West Texas Intermediate (WTI) crude oil closed at $101.70 per barrel, up $3.16 (3.2%) from the previous session.