European Stock Markets are in Red Amid Wall Street's Tech Selloff
European stock markets are in the negative territory after reporting big losses on Thursday as investors are showing concerns over the economic recovery. The US tech stocks selloff has added to bearish stock market movements.
Wall Street saw hefty losses on Thursday and extended the downside momentum into Friday trading as big tech stocks are plunging at a robust pace. Apple is among the biggest losers. Its shares plunged 8% on Thursday and it lost $150 billion market cap in a single day. Amazon, Nvidia, and Facebook are also among the biggest losers.
The U.S. stock market rally is halted by tech stocks selloff. The Thursday moves represented the largest single-day drop for the S&P 500 and Nasdaq since June 11.
US tech stocks are hit harder by European digital services taxes. European countries have announced to impose new taxes on tech giants while the White House has disliked the decision.
On the other hand, economic data indicates a sharp decline when compared to the month of July. The euro area Markit Purchasing Managers’ Index (PMI) dropped to 51.9 compared to 54.9 in July. Germany’s services PMI also dropped in August from the previous month. Moreover, the U.S. Federal Reserve policymaker Mary Daly said the economy needs more stimulus packages for recovery.
On the positive side, US jobless claims declined from analysts’ expectations. The U.S. Labor Department data indicated that new filings for unemployment benefits came in at 881,000 for the last week, down sharply from analysts’ expectations for the 950,000 filings.
What Does it Mean for Investors?
- Investors say new tech levies could initiate a new trade war.
- US dollar index soared slightly on Thursday and looks strong on Friday amid jobless claims.
- Euro is steady after dropping from $1.20 level.
- The Australian Dollar is under pressure as the Aussie economy officially went into recession.