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Tech Stocks Tumble Amid Geopolitical Fears
31 Mar
Summary
- US stocks face worst March and quarter since 2022.
- Tech megacaps like Microsoft plunged over 25% this year.
- Energy stocks achieved their best quarter on record.
US equity markets are on track for their worst March and quarter since 2022, significantly impacted by Middle Eastern geopolitical tensions and concerns over artificial intelligence.
Technology stocks have been hit particularly hard, with major companies like Microsoft and Adobe falling at least 25% this year. The Nasdaq 100 entered correction territory, dropping over 10% from its peak. This performance gap widened, marking the S&P 500's worst quarter relative to an equal-weight version since 2001.
In contrast, energy stocks have experienced a record-breaking quarter, with a 39% gain. Traders anticipate crude oil prices remaining elevated even after hostilities subside, potentially supporting the energy sector. The Magnificent Seven stocks have collectively fallen 16% this year, with Microsoft being the largest drag on the S&P 500.
Market volatility, measured by the VIX Index, surged to its highest level since April. Despite recent market downturns, data suggests demand for hedging further losses has decreased, with some investors positioning for a potential rebound.
