Tech Stocks Sink, Drag Down Market

Nasdaq falls more than 2%
By Newser Editors and Wire Services
Posted Dec 16, 2021 3:20 PM CST
Tech Stocks Sink, Drag Down Market
A pedestrian passes the New York Stock Exchange in this file photo.   (AP Photo/John Minchillo, file)

Stocks wobbled Thursday as investors studied moves by central banks to fight rising inflation, per the AP. The Dow fell 29 points to 35,897, the S&P 500 fell 41 points to 4,668, and the Nasdaq sank 385 points—2.4%—to 15,180. The decline in the tech-heavy Nasdaq came after several big technology companies fell. Apple, for example, dropped more than 4% and semiconductor stocks such as AMD and Nvidia sank by 5.8% and 7.3%, respectively, per CNBC. One factor: Large tech companies have benefitted greatly from low interest rates, which make their valuations more attractive. The sector could continue to slip, analysts said, as investors factor in rising interest rates through 2022.

On Wednesday, the Federal Reserve announced an acceleration of its pullback of economic stimulus as it pivots to fighting inflation. The central bank plans to shrink its monthly bond purchases and start raising rates as early as the first half of next year. The Bank of England, meanwhile, became the first central bank among leading economies to raise interest rates to fight inflation. The European Central Bank still plans to trim its pandemic stimulus, but not abruptly. Inflation has been a growing concern throughout 2021. Higher raw materials costs and supply chain problems have been raising overall costs for businesses, which have raised prices on goods to offset the impact.

(Read more stock market stories.)

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