The Hill
The tech stocks’ steep slide Monday morning came as the wider market
took a downturn amid growing concerns about a recession. Investors were spooked by Friday’s weaker-than-expected jobs report, which showed the U.S. adding only 114,000 jobs and the unemployment rate ticking up to 4.3 percent.
“The perfect storm panicked tech sell-off has now gained steam after the weaker jobs report yesterday fueled the R word fears and worries the Fed is now too late in its cutting cycle with tech stocks in the center of this Category 5 storm sell-off,” analysts from Wedbush Securities wrote in a research note Saturday.
Major tech stocks, which were already on shaky footing after mixed second-quarter results over the past two weeks, are also reeling from Warren Buffett’s decision to cut Berkshire Hathaway’s stake in Apple by half.
However, the Wedbush analysts argued in another note Monday morning that now “is not the time to panic on the tech trade.”
“We are getting inbounds from investors around the world today/over the weekend asking us if this tech bull market and historic run for tech stocks is over?” they wrote. “It’s NOT in our view and this is just a white knuckle moment in a multi-year bull run for tech stocks that need hand holding.”
Amid widespread excitement about the potential of artificial intelligence (AI), the tech sector has driven much of the market’s gains this year. As of late June, the Magnificent Seven accounted for 75 percent of the S&P 500’s gains, according to Axios.
Funny they are all excited about AI, yet fear large unemployment numbers.
