Traders on the NYSE, May 20, 2022
Technical companies haven’t seen a sell-off since 2001, and burst dotcom bubbles.
The Nasdaq was down 3.8% this week, falling for the seventh week in a row. This is the longest losing streak for the Technology Difficulty Index in 21 years.
Inflation, rising interest rates, the war in Ukraine and blocking the pandemic in China add to the catastrophic market as a whole and a particularly severe impact for investors in technology and stocks that have risen after historic stocks in recent years.
The Federal Reserve has signaled that it will continue to raise rates to fight inflation, which is a cause for concern that higher capital expenditures are coupled with deteriorating consumer confidence that will eat up profit margins.
Nasdaq has lost more than 29% since its peak on Nov. 19, closing on Friday at 11,354.62. The S&P 500 index did not go so badly, but on Friday it still touched the territory of the bear market, which means a drop of 20% from its maximum.
Cisco was among the biggest failures in technology for the week, falling 13% after the computer networking giant predicted an unexpected drop in revenue this quarter. Given its prevalence in the economy, Cisco said its leadership reflects the company’s decision to shut down Russia and Belarus, coupled with supply shortages due to Covid-19 blockades in China and uncertainty about when things will improve.
“Given this uncertainty, we are practical about the current environment and are mistaken on the side of concerns in terms of our forecast, taking it by a quarter,” the company said in a profit report.
Dell CEO Michael Dell delivers a keynote address at the Oracle Open World 2013 conference on September 25, 2013 in San Francisco, California.
Justin Sullivan Getty Images
Dell, which reported results on Thursday, fell more than 11% for the week. Shopify, which sells software to e-merchants, fell nearly 10%. Cloud-based software company Workday fell about 9% after analysts downgraded stocks due to fears of a recession. Security software vendor Okta fell 14%.
Actions related to billionaire Elon Musk were also affected. Twitter, which is currently in the process of being acquired by Tesla CEO for $ 54.20 per share, fell 6% this week to $ 38.29. Tesla fell 14%.
As part of Big Tech Apple fell 6.5%, suffering a drop eight consecutive weeks. Alphabet fell 6% and Amazon fell about 5%.
Now the Nasdaq is down 20% for the quarter and is at the rate of its worst quarterly figure since the fourth period of 2008.
WATCH: CNBC interview with Cisco CEO Chuck Robbins