Investors turned their backs on once-favourite technology companies over concerns about the economy, sending US markets into a tailspin in April.
The Nasdaq index fell more than 4% on Friday due to a sell-off in Amazon shares after the company announced a drop in online sales.
The tech-heavy index had its worst month since the 2008 financial crisis, falling 13% in April.
However, the market downturn isn’t just affecting tech equities.
The S & P 500 as a whole experienced its biggest one-day drop since June 2020. It has dropped about 14% since the beginning of the year.
In April, the Dow Jones Industrial Average plummeted 5%, bringing its total loss to approximately 9% since January.
Markets, which are typically used to forecast future economic health, have been anxious as economic dangers have grown.
Higher oil prices and the war in Ukraine are driving inflation in the United States and elsewhere to multi-decade highs.
Both the war and the ongoing impact of the COVID epidemic have had an impact on key supply chains, particularly in China, where lockdowns are still being used to keep the virus from spreading.
Apple has already stated that disruption in China will have a significant impact on its business.
And Amazon, which benefited from the pandemic surge in-home delivery demand, has noticed that the effect is starting to dissipate.
Amazon’s stock plunged 14% on Friday after the company revealed lower online sales and its first quarterly loss since 2015. Etsy, a smaller online marketplace, saw its stock drop by more than 8%.
While consumer spending, which is the main driver of the US economy, has held up so far, there are growing concerns that rising prices may cause buyers to be more cautious, leading to a recession.
The US economy shrank by 0.4 per cent in the first three months of the year, according to data released earlier this week. The European Union reported only 0.2 per cent growth in the first quarter on Friday.