With a staggering loss exceeding $750 billion in market capitalization, the most prominent technology firms faced severe declines on Monday, marking the Nasdaq’s worst day since 2022. The wave of sell-offs was primarily driven by escalating recession fears and potential trade war implications.
Impact on Tech Giants
Apple led the downturn, experiencing a drop of around $174 billion in value. Nvidia wasn’t far behind, losing close to $140 billion, closing down almost 5%. Remarkably, the AI chipmaker has witnessed a significant decline of nearly a third in value since peaking in January.
Tesla showed the most dramatic percentage drop, plummeting 15% and suffering its largest single-day loss since 2020. This follows a prolonged losing streak, with the stock now more than 50% below its highs from mid-December. The electric vehicle manufacturer saw a valuation dip of about $130 billion on the day, while Microsoft and Alphabet experienced reductions of $98 billion and $95 billion, respectively. Amazon and Meta rounded out the losses with declines of $50 billion and $70 billion.
Market Trends and Tech Sector Responses
On this bleak day, Alphabet and Meta each dropped over 4%, while Microsoft and Amazon fell at least 2% each. The Technology Select Sector SPDR Fund witnessed a decline exceeding 4%, stepping into correction territory, with shares more than 14% off their peak.
The downturn in the Nasdaq, now at a six-month low, has been exacerbated by fresh concerns regarding tariffs and the economic outlook in the U.S., leading to heightened anxieties among investors. This escalating situation has triggered fears of an impending recession.
Consequences for Semiconductor Manufacturers
The semiconductor industry, a crucial component of technology production, has also been adversely impacted. Proposals for new tariffs represent a direct threat to this sector. Recently announced initiatives, including a $100 billion investment from Taiwan Semiconductor Manufacturing, reflect leadership in the industry’s shift toward bolstering domestic productions.
The VanEck Semiconductor ETF has seen a notable decline of 16% since the beginning of the year, and on Monday alone, the ETF fell roughly 5%. Prominent companies such as Marvell Technology, ASML Holding, and Micron Technology faced declines of more than 6%, highlighting widespread distress across the sector.
As uncertainty looms, investors are advised to keep a close eye on market developments and potential recovery pathways for tech stocks as economic indicators gradually unfold.
