Media stocks joined tech in a downward spiral today as hopes of lower interest rates that have kept them relatively buoyant compared to tech seemed to give way to a broader malaise.
Investors have been rotating out of tech and into more value and interest-rate sensitive stocks since the last Fed meeting when chief Jerome Powell indicated lower rates are coming soon. Alphabet’s overall tepid earnings yesterday after market close didn’t help, exacerbating a rout today. The Google parent fell 5%. Tesla stock tumbled today after its quarterly earnings plunged and was one of the market’s biggest losers, falling more than 12%.
Amazon, Apple, Meta, Roku and Snap closed in the red. As Yahoo Finance put it, there’s fear that Big Tech’s power to fuel market gains may be fading. In aggregate, it said, the Magnificent 7 tech stocks lost more than $750 billion in market cap on Wednesday along. That’s the most on record for the new power group of Microsoft, Apple, Tesla, Amazon, Meta, Alphabet and Nvidia.
The tech-heavy Nasdaq had its worst day since October, 2022.
The S&P fell more than 2% for the first time in over a year.
The Dow Jones Industrial Average dropped about 500 points, or 1.2%.
That’s all despite recent solid economic data including S&P Global data today showing that business activity grew at its fastest pace in more than two years, and the latest inflation figures that showing prices may be cooling, and, therefore, interest rates heading lower.
The gloom today was widespread, pretty much all media was lower from Disney (down 1.25%) to Warner Bros. Discovery (1.74%), which also just appears to have just lost hope of keeping any of the NBA. Netflix and Comcast fell. Paramount ended lower with AMC Networks, Fox and Fubo.
AMC Entertainment was down after it reported a second quarter loss this morning, so were theater chains Cinemark and Marcus. Broadcasters fell.
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