We’re diving into why tech stocks are down today in our Friday market update.
The blow to tech stocks, including Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), and Alphabet (NASDAQ:GOOGL), started yesterday and it’s connected to the Federal Reserve’s recent actions. That includes announcing a winddown of asset purchases, as well as plans for several interest rate hikes next year.
So why are tech stocks down today because of this? It looks like investors are switching away from growth-oriented stocks. Instead, it appears that those traders are switching over to more consumer-oriented stocks.
Jim Paulsen, chief investment strategist at The Leuthold Group, said the following the CNBC about why tech stocks are down today.
“As the Federal Reserve turns more hawkish and expectations for higher interest rates rise, investors are lowering exposure to growth stocks. Typically, growth stocks exhibit a higher duration compared to value stocks because a higher proportion of their cash flows will be received in the more distant future.”
Of course, another factor that’s coming into play is the Covid-19 Omicron variant. This has continued to weigh on the market as the fear of lockdowns is scaring investors away from certain stocks. That helps explain why tech stocks, as well as other stocks are down today.
The current worry from investors also includes Omicron spreading quickly over the holiday season. Some experts are warning of a Covid-19 blizzard over the winter that will infect millions. Even so, it’s worth noting that the effects of Omicron are mild and aren’t likely to result in hospitalization or death.
Investors looking for more stock market news this morning are in luck!
It may be Friday, but we’re continuing our daily coverage of the stock market. For today, that includes Futu Holdings (NASDAQ:FUTU) stock falling, Cerner (NASDAQ:CERN) stock getting a boost, as well as this morning’s biggest pre-market stock movers. You can get all that info from the following links!
More Friday Stock Market News
- FUTU Stock: What Is Going on With Futu Holdings Today?
- CERN Stock Alert: Cerner Pops 15% on Acquisition Speculation
- Today’s Biggest Pre-Market Stock Movers: 10 Top Gainers and Losers on Friday
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.