AYX - Why Tech Stocks Are Plunging Today
During the market's tumult over the last two months, tech stocks have been a refuge for investors. The tech-heavy Nasdaq has handily outperformed the S&P 500 and the Dow Jones Industrial Average, and investors have generally believed that the tech industry is well positioned to survive and even thrive from the disruptions that the coronavirus pandemic is causing.
Areas like e-commerce, video streaming, and enterprise cloud computing could even benefit, they've argued, from the stay-at-home orders across the U.S. and much of the world. Indeed, Amazon.com and Netflix recently hit all-time highs despite the broad market still trading close to 20% down from its February peak.
Today, however, sentiment around tech stocks suddenly shifted with earnings season just around the corner. The bubble that had accumulated in recent weeks seems to be bursting. There was no direct reason for the sell-off, though there were some contributing factors. Last night, President Trump said he would temporarily suspend all immigration into the U.S. The details of such a ban were unclear, but the move could pose a challenge for tech companies, which rely on talented immigrants to fill their ranks.