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Markets drop as tech slowdown fears grow

Tuesday - 20/11/2018 18:00
A sell-off on Wall Street continued on Tuesday, amid steep declines in oil prices and losses among technology shares.
US stock market traders / GETTY
US stock market traders / GETTY

The Dow Jones Industrial Average shed 550 points to close 2.2% lower, weighed down by Apple, whose share price plunged by nearly 5%.

The broader S&P 500 dropped 1.8%, while the tech-heavy Nasdaq index fell 1.7% to its lowest level since February.

Meanwhile, benchmark oil prices sank nearly 7%, close to one-year lows.

What's driving the drop?

Connor Campbell at Spreadex described the sell-off as a "macro-car crash, with Brexit fears, the post-Apec pre-G20 US-China trade war flare-up and the continuation of a nasty US tech sell-off resulting in absolute carnage".

It also reflects underlying concerns about slowing global growth, according to Nariman Behravesh, chief economist at IHS Markit.

In the US, a robust economy had so far largely shielded stock markets from some of those worries.

However, Mr Behravesh said investors now expect a boost from tax cuts and increased government spending to fade.

"This stimulus will wear off by late 2019 and early 2020, and the US economy will join the others in seeing a significant loss of speed," he said.

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