Big techs were no exception. Stocks of major tech giants fell sharply as the New York Stock Exchange suffered a record bear market in the second quarter of this year. The possibility of a further decline is highly discussed on and off Wall Street.
CNBC, an economic media outlet, reported on the 30th (local time) that “in the second quarter of this year, as central banks raised interest rates in earnest to catch inflation, investors lowered the market value of the world’s largest technology companies.”
Excluding Saudi Arabia’s Aramco, shares of Apple, the world’s largest market cap, fell 22% in the second quarter, according to CNBC. This is the lowest score since the fourth quarter of 2018.
For Microsoft, it fell about 17%, its worst since the second quarter of 2010. Shares of Amazon and Alphabet (the parent company of Google) fell 35% and 22%, respectively. In the case of Amazon, the stock price fell the most in more than 20 years since the third quarter of 2001. Alphabet shares fell the most since the fourth quarter of 2008.
Shares of electric car maker Tesla fell by nearly 38%. This is the biggest drop since listing in 2010. Meta (Facebook parent company) shares fell more than 27%.
It is noteworthy that excluding Microsoft, it underperformed the Nasdaq index (down 22%). Big tech, which leads the entire New York stock market, also collapsed in front of a bear market.
The problem lies ahead. The first half of Wall Street is geared towards the fact that the New York Stock Exchange hasn’t bottomed out yet. If the Fed tightens sharply in earnest, it could enter a recession, which means that it will act badly for the stock market.
According to the Atlanta Federal Reserve Bank, ‘GDP Now’ estimates that the U.S. gross domestic product (GDP) growth rate (on an annualized basis) in the second quarter will be -1.0%. GDP Now is a representative economic forecasting model. This means that it could show negative (-) growth for two consecutive quarters following the first quarter (-1.6%). This is considered a technical downturn.
‘Doctor Doom’ Nouriel Roubini, a professor at New York University, said in a contribution to ‘Project Syndicate’, “The decline in global stock markets including the US could be close to 50%.” It should be viewed as a temporary rebound in a trend.”