Investors pulled back from US stocks on Friday, selling shares of large tech companies and dragging the tech-heavy Nasdaq Composite Index sharply.

The Nasdaq fell 2.4 percent in New York in the early afternoon, the largest drop in more than two months as a mixed US labor market report was seen as a trailblazer for tighter monetary policies that would tighten financial conditions and weigh on company valuations.

Etsy, Adobe, and Tesla were among the day’s biggest losers, falling more than 5 percent. Facebook collapsed by more than 2 percent, increasing losses from its most recent high in early September to over 20 percent. The blue chip index S&P 500 lost around 1.2 percent.

The sharp declines marked the volatile end of a trading period of two weeks, which was characterized by strong price fluctuations in all asset classes.

“I think investors are now expecting monetary tightening and that has historically put downward pressure on technology stocks,” said Kristina Hooper, Invesco’s chief global markets strategist.

The moves came after a report by the Bureau of Labor Statistics showed the US economy created just 210,000 new jobs last month, less than the 550,000 economists forecast in a refinitive poll.

While the economy created fewer jobs than forecast last month, the unemployment rate has still fallen to its lowest level since the pandemic began. “This wasn’t a bad job report,” said Hooper.

For investors, the data has opened the door to a faster pace of monetary tightening. Federal Reserve Chairman Jay Powell on Tuesday signaled his support for accelerating the Fed’s $ 120 billion monthly bond purchases. The program has been a pivotal pillar of the rally in stock prices since the depths of the coronavirus crisis last year.

In addition to the abrupt movements in the markets, the fund managers wanted to post profits towards the end of the year and not suffer from the change in sentiment.

“The prospect of a Fed moving from friend to foe so quickly makes some traders believe the best thing to do is make money and spend the weekend thinking about future interest rate developments,” said Max Gokhman, chief investment officer at AlphaTrAI.

The yield on 10-year US Treasuries fell in New York trading in the early afternoon by 0.07 percentage points to 1.37 percent. Bond yields move in reverse to their rates.

Investors have weighed a more restrictive Federal Reserve against emerging signs of a slowdown in global growth and the potential of the Omicron coronavirus variant to hamper economic recovery.

Germany has taken steps to impose social restrictions on people who have not been vaccinated, and US President Joe Biden has announced measures to slow the spread of the coronavirus, including stricter testing requirements for international travelers.

The Stoxx Europe 600 stock index lost 0.6 percent after losing 1.2 percent in the previous session. The London FTSE 100 fell 0.1 percent.

In Asia, the Hang Seng index in Hong Kong closed around 0.1 percent.

The shares of Chinese companies listed in New York also came under heavy pressure on Friday after the ride-hailing app Didi announced that it was delisting from the New York Stock Exchange and preparing to go public in Hong Kong.

Didi’s shares fell 17 percent in the US Hours., Baidu and Pinduoduo all fell about 8 percent, as did Alibaba.


Subscribe Us to receive our latest news in your inbox!

We don’t spam! Read our privacy policy for more info.


Please enter your comment!
Please enter your name here