U.S. markets and stock exchange traded funds plunged Friday, with technology giants taking the brunt of the blow following their quarterly results and the major benchmarks on pace for their worst week and month since March.
On Friday, the Invesco QQQ Trust (NASDAQ: QQQ) dropped 3.2%, SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) decreased 1.6%, and iShares Core S&P 500 ETF (NYSEArca: IVV) fell 1.9%.
The markets continued to retreat Friday on growing concerns over the spike in coronavirus cases, notably in Europe and the U.S., Reuters reports.
The U.S. is experiencing record high Covid-19 infection rates while Europe has already implemented strict lockdown measures that threaten the region’s nascent economic recovery.
“Markets are concerned that we are replaying February and March,” Chris Beauchamp, Chief Market Analyst at IG Group, told the WSJ. “It probably still isn’t in that category yet, but it is heading in the wrong direction.”
Additionally, volatility climbed ahead of the final weekend before Election Day on Tuesday.
“We’re two market days away from Election Day and people want to make sure that they’re not completely caught off guard,” Pete Santoro, an Equity Portfolio Manager at Columbia Threadneedle, told Reuters.
Meanwhile, internet stocks took a beating after their quarterly results failed to live up to expectations.
“There is a big selloff in those big tech names because they didn’t live up to the hype and people are really worried about next week’s election,” Kim Forrest, Chief Investment Officer at Bokeh Capital Partners, told Reuters.
Big tech has been the main driver of the stock market recovery this year, but that also means “when we see any disappointments on particularly high-multiple stocks, then obviously the magnitude of the downgrade or the earnings-miss becomes far greater,” UBS Strategist Nick Nelson told the WSJ.
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