Wall Street’s main indexes tumbled on Thursday and were on track for their deepest one-day dives since June as investors dumped the high-flying technology sector, while concerns about a long and difficult recovery from the COVID-19-induced recession were highlighted by new economic data.
The technology-centric Nasdaq led the declines as its heavyweight stocks took a hit including Facebook Inc, Apple Inc, Amazon.com Inc, Microsoft Inc and Google-parent Alphabet Inc which were all down between 4% and 7%.
The five stocks, deemed stay-at-home winners during the coronavirus crisis, also account for roughly a quarter of the S&P 500’s market value and have driven the stock market’s narrow technology-led recovery from the pandemic lows hit in March.
“Think about the mounting number of risks the market has been shrugging off over the last couple of months here,” said Emily Roland, co-chief investment strategist and John Hancock Investment Management. “We’re 60 days away from the election. That may be an area where investors are getting a bit spooked.”
She added: “Looking at the data today, the market has had the ability to power higher and hasn’t paid any attention to a macro environment which, yes, is improving which is encouraging, but the economy remains fragile here.”
Earlier in the day, data showed the number of Americans filing new claims for unemployment benefits fell more than expected last week, but remained extraordinarily high. The closely watched monthly payrolls report is set for Friday.
MacDailyNews Take: This too shall pass. Expect a healthy degree of volatility in the lead up to November 3rd as the market hates uncertainty.