The Nasdaq tumbled on Tuesday as investors dumped high-flying technology stocks, while Tesla tracked its worst day in nearly six months after a surprise exclusion from the S&P 500.
All eleven major S&P sectors fell in early trading, with declines worsening after news on Friday that SoftBank made significant option purchases during the run-up in U.S. stocks.
Energy, financial and information technology stocks were among the biggest decliners.
“To see a period of carnage is reasonable, considering the massive run up that we have experienced since the early part of the year,” said Eric Schiffer, chief executive officer of private equity firm Patriarch Organization in Beverly Hills, California. “We’ll need some time to see whether this is a fundamental shift versus a technical on exhibit, because if it is a shift to fundamentals, that is not a position where you’re going to want to necessarily buy a dip.”
At session lows on Tuesday, Facebook, Amazon.com , Apple, Tesla, Microsoft, Alphabet and Netflix – together known as “FAATMAN” – collectively lost more than $1 trillion in market capitalization since Sept. 2.
Tesla plunged another 15.4% to a three-week low after the electric-car maker was excluded from a group of companies being added to the S&P 500.
MacDailyNews Take: This too shall pass. Again, AAPL shareholders should expect a bit of a wild ride after such a large run up.