Wall Street’s Big Tech Has Worst Week Since January Amid Uncertainty Over Interest Rates

The Nasdaq Composite Index, which comprises marquee names in technology such as Amazon, Apple, Netflix and Google, closed Friday’s session down 132 points, or 1.3%, at 10,475. For the week, the Nasdaq tumbled 5.7% - the most since a 7.6%-plunge in mid-January.

Wall Street’s Big Tech sector had its worst week since January, tumbling almost 6% this week, as investors dumped high-prized technology shares amid uncertainty over whether the Federal Reserve would slow down the intensity of interest rate hikes meant to contain runaway inflation.

Several Fed policy-makers spoke on Friday about the possibility of the US central bank resorting to smaller rate hikes than the aggressive regime advocated by Chairman Jerome Powell several days ago, renewing speculation about an interest rate pivot.

Investors, economists and business leaders have warned that the United States could land in a deep recession just two-and-a-half years after the last slowdown that broke out with the coronavirus pandemic measures in mid-2020.

One reason, they said, would be the Fed’s interest rate hikes that have added 400 basis points to key lending rates over the past nine months versus a pandemic-era environment of zero rates. Inflation has been trending at the highest levels since the 1980s. The Fed officials, who spoke on Friday about the possibility of a pivot on interest rates, said smaller hikes might do the same job of containing inflation over a longer period.

The US economy did sputter in the first two quarters of the year, with back-to-back negative growth rates of 1.6% and 0.6% in Gross Domestic Product that technically placed the nation in a recession. The third-quarter GDP, however, came in at a resilient 2.6%.

The Nasdaq aside, Wall Street’s two other major stock indexes---S&P 500 Index and the Dow Jones Industrial Average---also reported sharp losses.

The S&P 500 Index, which represents the top 500 US stocks, closed down 51 points, or 1.4%, on Friday at 3,770. For the week, it lost 3.4%, its most in seven weeks.

The Dow Jones Industrial Average, which serves as Wall Street’s broadest equities indicator with stocks of 30 large US corporations, fell 402 points, or 1.3%, to finish at 33,403. For the week, it fell 1.4%, its most in four weeks.