2024 started with a bang in the technology sector, as shares of tech stocks plunged amidst concerns over weak macroeconomic conditions. The tech-heavy Nasdaq Composite index saw its worst day in over a year on the first day of trading, with the index falling by 2.8 percent.
The losses were driven by a variety of factors, with heightened global economic uncertainty leading the way. With the U.S. economy stagnating, investors grew increasingly concerned that tech-related companies would be among the first to suffer. Uncertainty over the fate of U.S.-China trade negotiations was also seen as a contributing factor, as hopes that the two sides would reach a deal before the start of the year evaporated.
The sell-off appeared to be widespread, as all 11 sectors of the tech-heavy Nasdaq were in the red. The index’s biggest losers included riot Blockchain, a cryptocurrency mining company, which fell by 12.1 percent, while Nvidia and Microsoft both fell by 7 percent. Apple shares also tumbled by 4.2 percent, though the company still remains one of the tech sector’s biggest long-term investments.
Analyst recommended caution as investors reassess the outlook for the technology sector in 2024. With the U.S. and China yet to reach a trade agreement, and a globalwide slowdown likely to affect tech earnings, it may be a bumpy ride for tech investors as the year progresses. On the other hand, many analysts are bullish on tech stocks in the long-term, citing strong fundamentals and impressive innovation in the sector.