Investors fear the effect of inflation on the valuation of technology stocks, leading to falls in the sector that drag down indices on Wall Street.
After the records came the falls. Wall Street starts the session down, with the main reference indexes pressured by the devaluations recorded in the technology sector. Quoted stocks in this sector are penalized by investors’ concerns about a growth in inflation.
Technology stocks started to depreciate earlier this year as fears related to inflation and higher interest rates increased. Growth-oriented stocks tend to be hit hardest by rising rates as they erode the value of future earnings.
“If you’re valuing a high-growth company based on ten-year earnings, those earnings in the future are worth much less today with higher inflation levels,” explains Dan Eye of Fort Pitt Capital Group, quoted by Reuters.
In this context, the Dow Jones industrial loses 0.49% to 34,572.74 points and the S&P 500 retreats 0.91% to 4,150.34 points. The Nasdaq tech falls 2.13% to 13,115.85 points.
In the falls, then, the technological ones stand out. Apple loses 2.15% to $124.12, Amazon retreats 0.81% to $3,164.69, and Facebook falls 1.44% to $301.57. Tesla, meanwhile, loses 2.71% to $612.02. News that the electric car maker has put on hold plans to expand its Shanghai plant into an export center also contributes to the decline this session.
