Tech Stocks Plunge Puzzles Experts... Nasdaq Falls 4.9% (Close)

[Asia Economy New York=Correspondent Baek Jong-min] The U.S. New York stock market plunged on the 3rd (local time) along with a sharp decline in technology stocks that had been soaring repeatedly.

On the 3rd (local time), the Dow Jones Industrial Average fell 807.77 points (2.8%) to close at 28,292.73, the S&P 500 index dropped 125.78 points (3.51%) to 3,455.06, and the Nasdaq index fell 598.34 points (4.96%) to close at 11,458.10.

[Image source=AP Yonhap News]

The Nasdaq had just broken through the 12,000 mark for the first time the day before, but in just one day, major tech stocks such as Apple, Amazon, Microsoft, and Facebook plunged in succession, recording the largest drop since the recent COVID-19 pandemic.

Apple and Tesla, which had driven the index rise through simultaneous stock splits, fell sharply by 8% and 9%, respectively. Apple and Tesla surged continuously after announcing the stock splits and showed strong performance even on the first trading day after the split on the 31st of last month, but collapsed without resistance. Tesla entered a correction phase, falling nearly 20% in just three trading days due to a large-scale capital increase and the sale of shares by its second-largest shareholder.

Meanwhile, the fear index VIX surged by 26%, reflecting increased uncertainty in the market.

The European stock markets, which closed on the same day with only slight adjustments unlike the New York stock market, made the plunge in New York stand out even more.

Regarding the decline in tech stocks, the market has suggested various opinions such as a predicted correction, profit-taking, and hedging sales, but no clear answer has been provided as to what triggered the sharp drop that day. Experts also offered diverse opinions but failed to pinpoint a specific cause.

Evaluations of the economic indicators released that day were also confusing. Weekly initial jobless claims came in at 881,000, significantly below market expectations and falling below 1 million for the first time in three weeks, but this was interpreted as an effect of seasonal adjustment. The exact employment market situation is expected to be confirmed by the U.S. government's employment data released the following day.

The slowdown in the expansion of the non-manufacturing Purchasing Managers' Index (PMI) also seemed to be negatively reflected. The ISM Non-Manufacturing PMI released that day was 56.9, down from 58.1 the previous month.

The decline in the New York stock market also affected other markets. Crude oil prices showed a sharp drop of over 3% during the day but managed to reduce losses in the afternoon. West Texas Intermediate (WTI) crude oil for October delivery closed down 0.3% ($0.14) at $41.37 per barrel.

Gold for December delivery closed at $1,937.80 per ounce, down 0.4% ($6.90). The dollar index, which shows the value of the dollar against major currencies, remained almost unchanged from the previous day at around 92.77.

This content was produced with the assistance of AI translation services.