Technology shares led the broader market lower on Monday as investors dumped high-flying Big Tech stocks, pushing the Dow Jones Industrial Average and the S&P 500 off their record highs.
The Nasdaq Composite dropped 2.5% to 13,401.86, finishing the day at its session low as Microsoft and Apple lost more than 2% each. Tesla shed more than 6%.
The Dow cut gains and turned negative rapidly in the final minutes of the session after climbing more than 300 points to another record high.
The blue-chip Dow ended the day 34.94 points, or 0.1%, lower at 34,742.82.
The S&P 500 fell 1% to 4,188.43, slipping from a record closing high.
Investors rotated out of growth names, resuming a trend seen earlier this year amid rising fears of inflation and higher interest rates. Facebook dropped more than 4%, while Amazon and Netflix both dropped over 3%. Alphabet dipped more than 2% after a downgrade by Citigroup. Cathie Wood’s Ark Innovation ETF fell 5% to its lowest level since November.
Cloud stocks plunge to six-month low as investors hasten rotation out of recent top performers
The rotation out of tech stocks continues to hammer cloud companies the hardest, as investors sell out of last year’s best performers.
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The tech sell-off began in February and has picked up steam in the last couple of weeks. The central theme to the market rotation has been concern about rising interest rates, which have traditionally hurt high-growth companies, coupled with a move into stocks that tend to outperform in periods of inflation, such as financials, commodities and industrials.
For the year, the cloud index has dropped 15%, compared with the Dow’s 14% gain and the 4% increase in the Nasdaq Composite.
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Eng