Tech stocks are being crushed. The Reality of the Fed’s Descending Disaster Uphits.

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Big Tech stocks took a hard hit on Thursday, with losses piling up as the day went on.

The reality of the Fed’s decision to cut back on bond purchases more quickly finally dawned.

The tech-heavy Nasdaq Composite went into a tailspin with about an hour left of the trading day. By the time the bell rang, the index was down 2.5%.

Things weren’t so bad for the S&P 500 and the

Dow Jones industrial average.
The S&P 500 fell 0.9% and the Dow, which had been in the green for most of the day, fell 30 points, or 0.1%. Towards the end of the afternoon, losses at Apple (AAPL) and Microsoft (MSFT) both worsened by more than 2.9%, weighing on the Dow.

Indices rocketed Wednesday afternoon after the Fed announced it would end its bond-buying program in March and announced it would raise interest rates three times by the end of next year.

Currently, less liquidity flowing through the markets makes investors less willing to place moderately risky bets on highly-rated companies seeking innovations to make significant profits many years later.

Amazon.com

(ticker: AMZN),

Netflix

(NFLX),

Tesla

(TSLA) and

Nvidia

(NVDA) saw its shares plunge between 2.3% and 6.8% on Thursday. The

ARK Innovation
The Exchange-Traded Fund (ARKK) is now down about 11% since December 8.

An increase in short-term interest rates would counteract persistently high inflation. That could slow economic growth — and indeed — the largely economically sensitive Dow is still below its all-time high on Nov. 8.

The central bank’s action didn’t stop there. On Thursday, the Bank of England increased interest are reference interest rate to 0.25%, from 0.1%. The European Central Bank kept interest rates at minus 0.5%, but reduced the number of bonds it would buy.

While the banking moves could be a problem for many stocks, many performed well. According to FactSet, just over half of shares rose on the S&P 500. Most US stocks had been falling for some time due to uncertainty about Fed policy changes.

On the labor front, initial claims for unemployment benefits rose to 206,000, above forecasts of 200,000, but the four-week average fell to 203,750, the lowest level since March 2020. That report does little to change the Fed’s story.

Broad stock market optimism extended to Asian and European investors. The

Shanghai composite
index ended the day 0.8% higher with Hong Kong’s

Hang Seng Index
0.2% profit. Japanese

Nikkei 225
increased by 2.1%. The pan-European Stoxx 600 index rose 1.2%.

Here are 6 stocks on the move:

Accenture (ACN) gained 6.6% after beating earnings forecasts and raising expectations for the full year.

Adobe (ADBE) fell 10% after earnings only met analysts’ forecasts as the The outlook for 2022 was below expectations.

DocuSign (DOCU) fell 0.7% after being reduced to Overweight’s Equal Weight at Morgan Stanley.

AT&T

(T) gained 7% after upgrading to Overweight from Equal Weight at Morgan Stanley.

Regeneron Pharmaceuticals

(REGN) fell 4% after a study found that the Covid antibody doesn’t work as well against Omicron.

Delta Airlines

(DAL) gained 2.2% after promising “meaningful profitability” on its investor day in 2022.

Write to Jacob Sonenshine at [email protected], Pierre Briançon at [email protected] and Ben Levisohn at [email protected]