Facebook crash plunges the Nasdaq index by 2% … and stocks suffer heavy losses

U.S. stocks fell at the close on Monday as selling tech stocks resumed amid the lingering threat of high inflation and the blackout that hit Facebook, Instagram and the WhatsApp instant messaging app.

The S&P 500 was down 1.3% – back from its 100-day average – while the Nasdaq 100 was down 2.2% and the Dow Jones Industrial Average was down 0.9% .

The losses were led by high-growth tech companies – including Amazon and Facebook, while vaccine makers also fell after Merck & Co. An effective drug against the Corona virus. Meanwhile, energy stocks have increased along with oil prices.

Facebook’s value fell 4.9% due to the disruption of site services, while Twitter’s stock fell 5.79%, while Amazon’s fell 2.85%.

We have an energy crisis, supply chain issues, higher inflation, signs of weak growth and a lot of talk about stagflation, ”Deutsche Bank strategist Jim Reed said in a note.

Global markets took a risky turn amid a growing list of concerns, just as investors braced for the start of the Federal Reserve’s stimulus cuts early next month. Inflation rates and high Treasury yields make blue chip investors paying for high growth stocks less attractive. Profit risk may also be higher for some technology companies.

“Tech stocks will likely be the hardest hit as higher interest rates mean higher discount rates for future earnings, and I expect this momentum to continue as long as inflation expectations continue. remain on the high end, ”said Brian Price, head of investment management at Commonwealth Financial Network.

Fears of a spreading energy crisis also added to concerns about inflation on Monday as energy and gas prices rose in Europe before the onset of winter. Germany’s November power contract hit a record high as natural gas futures continued to rise. Meanwhile, New York crude oil hit its highest level since 2014, with OPEC + agreeing to increase production for the month of November.

“The post-pandemic recovery appears to be running out of steam; tight supplies and a worsening energy crisis mean prices are rising and high inflation may not be as temporary as the Fed initially thought,” he said. said Fiona Cincotta, chief financial markets analyst at City Index.