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Speaking at a news conference, Powell noted that the Federal Reserve understands the “hardship” inflation is causing and how it is affecting tech and other stocks.
Stocks at large, especially tech stocks, have significantly declined in the last few days after the Federal Reserve raised its benchmark interest rate. The Federal Reserve raised its benchmark interest rate by half a percentage point in order to tackle inflation. As a result of the recent happenings, top tech companies have lost more than 1 trillion in value within three trading sessions. With the losses recorded in different sectors, investors are more interested in putting their money where it is safe.
Fed Chair Jerome Powell revealed no plans for more than half a percentage interest rate hike. He also declared that inflation was running at its peak. Within a few days of the announcement, the world’s most valuable public company Apple Inc (NASDAQ: AAPL) lost $220 billion in value. At press time, Apple has a market capitalization of $2.57 trillion.
Tech Stocks Lost Over 1 Trillion as Federal Reserve Raises Interest Rates
Markets initially jumped in reaction to Powell’s statements on Wednesday. However, general stocks plummeted on Thursday and have continued to go lower. Since the close of trading on Wednesday, S&P 500 US Stock index has shed about 7%, dropping below the 4,000 mark on Monday. Meanwhile, the Invesco Nasdaq 100 ETF fell around 10% during the same period. As it stands, tech stocks have suffered the most due to the Federal Reserve decision on the interest rate.
Apart from Apple, other tech stocks also saw huge losses after the Federal Reserve declaration. They include Microsoft Corporation (NASDAQ: MSFT), Tesla Inc (NASDAQ: TSLA), Amazon.com Inc (NASDAQ: AMZN), Alphabet Inc (NASDAQ: GOOG), Nvidia (NASDAQ: NVDA), and Facebook’s parent company Meta Platforms (NASDAQ: FB). Microsoft recorded a loss of about $189 billion in its valuation, and EV maker Tesla’s valuation dropped to $199 billion a few months after its market sank below $1 trillion. While Amazon is worth $173 billion less than last week, Alphabet is also $123 billion less in value. In addition, graphics card maker Nvidia shed $85 billion, and Meta Platforms’ market value was reduced by $70 billion in valuation.
US Stock Market Declines
Speaking at a news conference, Powell noted that the Federal Reserve understands the “hardship” inflation is causing and how it is affecting tech and other stocks. He promised that the Fed is “expeditiously” moving to bring it down.
US stock futures have been plunging since the beginning of the year in reaction to the possibility of an increase in interest rates. Since then, investors have been waiting for official words on interest rates. As expected, inflation reports have changed the course of events.
Currently, Microsoft stands at $2.05 trillion, Tesla at $896.82 billion, Amazon at $1.17 trillion, and Alphabet at $1.52 trillion. Furthermore, Nvidia has a market cap of $467.62 billion, and Meta Platforms boasts $551.51 billion.