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Amidst larger market uncertainty, 2020’s top-performing tech sector witnessed heavy selling leading to a broader market correction. Also with the fears of another lockdown, President Trump said that they won’t be going for the same.
On Wednesday, September 23, markets continued to remain under pressure after taking a brief pause the previous day. Wall Street investors continued its selling spree over the uncertainty around further stimulus and the rising COVID-19 cases. Investors’ favorite tech sector dragged the markets down with top stocks correcting anywhere between 2-5%. Apple Inc (NASDAQ: AAPL) shares corrected over 4% ending the trading day at $107.12. Amazon.com Inc (NASDAQ: AMZN), which rallied on analyst’s call on Tuesday, also corrected 4% briefly falling below $3000 levels. Mircosoft Corporation (NASDAQ: MSFT) corrected 3.2% while Facebook Inc (NASDAQ: FB) stock also 2.25% down.
It looks like the honeymoon period of 2020 for the tech sector can like take a pause from here. Some analysts have cautioned that the valuations for some of the tech companies have skyrocketed above reasonable levels. Thus, we might see a correction going further.
Looking at the broader market correction on Wednesday, the Dow Jones Industrial Average (INDEXDJX: .DJI) crashed over 500 points ending at 26,763.13 levels. The S&P 500 (INDEXSP: .INX) also dropped 2.37% ending at 3,236.92 levels. The tech-heavy Nasdaq Composite pulled back 3% closing at at 10,632.99 levels.
This month has remained pretty whimsical for the markets with multiple factors contributing to it. For September so far, Dow Jones is down 5.9% while the S&P 500 has corrected 7.5%. Speaking to CNBC, Art Hogan, chief market strategist at National Securities said:
“This rotation out of tech and into cyclical stocks has picked up legs in September. September is a historically tough month and this one has been a quagmire of headwinds. Today is reflective of that.”
President Trump Says He Won’t Announce Shutdown in the U.S.
Earlier this week, UK Prime Minister Boris Jhonson said that the country can possibly opt for another round of shutdown looking at the major concerns of rising COVID-19 cases. The markets have largely remained on the edge as the economic outlook and the road to recovery looks uncertain going further.
While Wall Street has been fearing a similar move in the U.S., President Trump cleared the air saying that they won’t go for another shutdown, for sure. “The U.K. just shut down again. They just announced that they’re going to do a shutdown, and we’re not going to be doing that,” Trump said.
Since the concerns with coronavirus spread don’t seem to be slowing down anytime soon, Wall Street is waiting for another round of stimulus measures from the Federal Reserve. The Fed Chairman Jerome Powell assured that they would continue to support the economy as long as it needs. But there’s little clarity on this matter for now.
“We’ve come a long way pretty quickly, and that’s great. But there’s a long way to go. So I just would say we need to stay with it, all of us. The recovery will go faster if there’s support coming both from Congress and from the Fed,” Powell said.
With the general elections in the U.S, the market uncertainty is like to continue over the next months as per analysts’ predictions.