Tech suffered its worst day since March on Thursday as major stocks got slaughtered on Wall Street, but it is still holding on to some massive gains
When I checked my portfolio last night I thought I was in a nightmare time travel scenario where I was transported back to mid-March and the market was in freefall. Apple’s 8% drop was the first sign that things were looking really bad, but luckily we did not experience quite the same crash as those pandemic-driven losses five months ago.
However, it was still quite bad, with U.S. stock futures plunging on Thursday night amid a wider tech stock sell-off that looks set to continue building on its downward momentum today. Apple is down more than 3% after-hours once more, with Facebook, Amazon, Netflix, Alphabet, and Microsoft all dropping more than 1% too.
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How far did the benchmarks fall?
With tech all-but dominating the stock market’s growth in the past decade, and especially in recent months, it is no surprise that all of the major U.S. indexes plummeted alongside them on Thursday.
The tech-heavy Nasdaq (NASDAQ: QQQ) was by far the worst affected of the major indexes, falling 5%. Those steep declines in tech shares come after the sector drove the lion’s share of the broader market’s comeback off the coronavirus sell-off lows. Since March 23, the S&P 500 tech sector is up about 70% while the Nasdaq is up 68% in the same period. For the year, tech has rallied more than 30%.
The Dow Jones Industrial Index (NYSEARCA: DIA) ended the day with a loss of 807 points, or 2.8%, as the blue-chip 30 stock index saw its highest weighted investments such as Microsoft and Salesforce slip. Having only just wiped out its total losses for 2020 this week, the Dow saw its stock fall into the red year-to-date once more, now sitting down 1.8% in 2020.
Finally, the S&P 500 (NYSEARCA: VOO) also fell more than 800 points or 3.5% yesterday, seeing it fall from recently achieved all-time highs. With the likes of Apple, Microsoft, Amazon, and Berkshire Hathaway as its top holdings, their losses have wiped out the major benchmarks total gains in September so far.
There was panicked talk of yet another crash similar to the pandemic-driven losses of mid-March, and judging by after-hours movement today, we could have yet another day in the red, so brace yourselves.
Easier said than done, but when looking at all that red in your portfolio, don’t forget to check how much those same stocks are up year-to-date. Also, if you have been avidly investing since March, it is very unlikely that your portfolio will be in the red given the whopping gains since then.
Much of this gain has arguably been unwarranted given how overpriced the market has been in relation to the struggling economy due to COVID-19. Take Apple, for example: It’s still up 61% YTD, worth more than $2 trillion, and has a new iPhone release as well as several other products on the horizon in 2020. All of this has been priced in, and although we may see some blips here and there, the market is still holding on to some very healthy gains.
And best of all, just think of all the discount buying you can do today?
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