(Bloomberg) — The stock-market drubbing is hitting the once-favored technology giants hard.
A wall of worry, from the omicron coronavirus variant to the Federal Reserve’s signal that it may speed up its withdrawal of stimulus, is driving investors out of technology companies that were once seen as a harbor amid the market storm.
The so-called NYSE FANG+ Index tracking the tech industry’s giants brushed up against a correction on Friday — with a drop of 9.99% from its closing peak on Nov. 4. That leaves it just shy of the 10% tumble that would mark a full-fledged correction in the eyes of traders.
“We are in the midst of a massive liquidation in high-growth stocks — it’s very difficult to predict when that may end,” said Andrew Ross, a managing member of Confluence Global Capital. “There are a lot of people being forced out of positions right now.”
Stocks like Netflix Inc., Nvidia Corp., Facebook-owner Meta Platforms Inc. and Amazon.com Inc. — some of the go-to names during the pandemic — are tumbling amid questions about the path of the Fed, valuations, year-end volatility and perhaps even some profit-taking after a solid year of gains. The NYSE FANG+ Index is still up about 14% in 2021.
Alibaba Group Holding Ltd. and Baidu Inc., which tumbled as U.S. regulators move closer to delisting Chinese firms, make the pain in the 10-member index look even worse.
Alibaba plunged 8.2% Friday, while Baidu sank 7.8%. Tesla Inc. lost 6.4%, while Apple Inc. dropped 1.2%. The Nasdaq 100 Index closed down about 5.2% from its all-time high. Meta Platforms is down almost 20% from its September high, nearing a bear market. The Nasdaq 100 Index closed down about 5.2% from its all-time high.
The high-growth, high-momentum stocks were among Wall Street’s top performers for most of 2021. A hawkish tilt from the Fed leaves investors bracing for the risk of rising interest rates that will undermine some of the most highly valued stocks the most.
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