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US markets end sharply lower amid weakness among tech stocks

09 Sep 2020 Evaluate

The US markets ended sharply lower on Tuesday, extending the pullback seen over the course of the two previous sessions, led by technology stocks which had driven the five month rally, as the Nasdaq Composite booked its quickest plunge ever from a record close to correction territory. Technology stocks helped to lead the way lower once again, as Facebook, Amazon, Microsoft and Apple all posted steep losses on the day. High valuations especially for technology companies, a sluggish economic recovery in the wake of the coronavirus pandemic, geopolitical risks including US - China tensions, and the upcoming November elections all posed risks for investors.

President Donald Trump vowed to end the country's reliance on trade with China. Trump raised the idea of decoupling the US and Chinese economies. He threatened to punish American companies that create jobs overseas and to prevent those that do business in China from winning federal contracts. Trump said ‘we will manufacture our critical manufacturing supplies in the United States, we will create made in America tax credits and bring our jobs back to the United States and we will impose tariffs on companies that desert America to create jobs in China and other countries’. Meanwhile, China said it would launch an initiative of its own to set global standards on data security, a move seen as an attempt to counter US efforts to isolate their networks from Chinese technology. 

Dow Jones Industrial Average dropped 632.42 points or 2.25 percent to 27,500.89, Nasdaq fell 465.44 points or 4.11 percent 10,847.69 and S&P 500 was down by 95.12 points or 2.78 percent to 3,331.84.

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MoneyWorks4Me is a SEBI-registered Investment Adviser (IA) dedicated to helping investors build long-term wealth through transparent, research-driven, conflict-free guidance. Founded in 2008, we started our journey as a Research Analyst (RA), providing deep fundamental analysis, intrinsic value insights, and long-term investing frameworks for Indian equities. In 2017, we transitioned to a full-fledged SEBI-registered Investment Adviser, strengthening our commitment to acting as a fiduciary—always putting the investor’s interest first.

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