After years of screaming higher, almost regardless of what the economy was doing, tech-oriented stocks are tanking and dragging down the rest of Wall Street.
Many of these high-profile companies are still making billions of dollars in profits, and they continue to dominate the top of the rankings for most valuable businesses. But two big changes have caused their stocks to come sharply back to Earth this year: Interest rates are rising, and expectations for their big continued growth suddenly look much more shaky.
Consider Netflix, whose stock more than tripled between early 2018 and its peak last November. It’s since lost virtually all that gain, dropping by more than two thirds this year alone for the worst loss in the S&P 500 as of Tuesday.
Similarly, Facebook parent Meta Platforms has lost close to half its value this year. Neither company falls into Wall Street’s “technology” classification; they’re instead categorized as “communications services” companies, along with many other internet-related stocks.