Tech Stocks Tumble Amid Economic Concerns and Weak Earnings Reports

Global equities fell on Friday, with U.S. Treasury yields reaching multi-month lows due to economic worries and disappointing forecasts from tech giants like Amazon and Intel. The Nasdaq Composite index dropped 3%, sparking concerns about Big Tech valuations. Experts stress the need for Federal Reserve intervention to stabilize the economy.

Global equities experienced a sharp decline on Friday, with U.S. Treasury yields hitting multi-month lows, driven by economic concerns and dismal forecasts from Amazon and Intel, adversely affecting highly valued tech firms. The Nasdaq Composite index slumped 3%, moving towards a correction phase fueled by apprehensions over Big Tech valuations and weak employment data exacerbating fears of an economic slowdown.

Tom Plumb, Chief Executive and Portfolio Manager at Plumb Funds, stated, "This is an old-fashioned correction, and it's not something anyone can predict at its onset or conclusion. As we transition from growth perception to the need for government intervention through lower interest rates, we anticipate economic stabilization. The Federal Reserve's rate cuts could potentially drive a recovery from the current 16,600 levels to over 18,000 by year-end."

Claudia Sahm, Chief Economist at New Century Advisors and former Fed economist, remarked, "The Fed has ample room to mitigate economic pressure since normalization hasn't started. This isn't a crisis but a slowdown requiring control. A deliberate rate cut in September could be prudent, despite September seeming distant. We're not in a crisis; proactive measures are needed."

Yung-Yu Ma, Chief Investment Officer at BMO Wealth Management, emphasized, "A 50 basis point Fed cut in September is warranted as the labor market softens. The Fed is lagging, and current rates are overly restrictive—a 50 basis point cut would only bring it up-to-date."

(With inputs from agencies.)