Tech stocks rallied in the previous week, gaining a significant amount. However, the rally fizzled out soon. Despite that, investors remained focused on tech companies. While they aren’t hitting record highs, the whole industry is generating great profits so far. On the other hand, there’s also been a surge of speculative options among retail investors. Some analysts think that tech stocks have become overheated and prefer other shares.
Valuations are elevated, but analysts are mindful of the earnings and revenue potential in the coming years from areas such as cloud computing and artificial intelligence – stated Kerry Craig, JPMorgan Asset Management strategist. He thinks that most likely, there won’t be a repeat of the tech wreck of the late 1990s as the market and sector have changed considerably since then.
The U.S. market was in turmoil on Friday. What about other markets?
U.S. stock futures fluctuated on Friday as investors waited for the August jobs report. Nasdaq 100 Index futures plummeted down by 1.1%. However, the S&P 500 Index changed slightly during the last session.
Nasdaq 100 Index futures plunged in the red as some of the momentum from the tech rout dissipated. But the S&P 500 contracts gained 0.7% before lowering again. Microsoft Corp., Amazon.com Inc., and Facebook Inc. shares were slightly lower in pre-market trading.
In Europe, the Stoxx 600 Index remained almost the same. On the other hand, the MSCI Asia Pacific Index tumbled down by 1.2%.
European bank stocks fluctuated after the banks gained due to news that Spain’s CaixaBank SA and Bankia SA are discussing a 14 billion-euro merger. It seems the tech-driven collapse in U.S. markets hasn’t influenced the other markets significantly.
Emerging-market stocks also declined for a third day in a row. Asian shares fell, with Australia’s benchmark recording the biggest drop since May. However, according to analysts, the jobs report may show that the labor market continued to recover in August.
