Several stocks ended on bearish territory on Wednesday. The Nasdaq composite tumbled down by 4.8%, overall losing 11% since last week. Meanwhile, Tesla suffered the worst rout in its history, losing 34% in September.
Apple has plummeted down by 6.9%, shaving off almost $140 billion in market value on Tuesday. The stock’s three-day slide increased to 14%, the most since October 2008.
U.S. stocks have been trading in the red for the third day in a row on Wednesday. While tech stocks rallied recently, their downfall continues. It seems sell-off in the technology sector is picking up steam. Oil prices also collapsed. On the other hand, Treasuries soared along with the U.S. dollar.
Experts claim stocks are overpriced
Thus far, the hardest-hit sectors remain sharply higher for the year. Analysts argue whether the latest pullback is a sign of market health or the start of a larger downfall. Even though speculation that drove bullish bets in options markets has broken in September, it still managed to wipe out trillions in market value.
Some froth has come off the market, which is a good thing – stated Tom Essaye, the founder of “The Sevens Report” newsletter. Despite that, stocks stand much higher than their fair value. They may end in the red again with little provocation.
Meanwhile, investors worry about the last leg of a rally that pushed valuations to record levels. West Texas Intermediate crude plummeted down by nearly 8% in New York. The broader index also hit the lowest level since Aug. 11. Four hundred fifty of the S&P’s 500 members fell, with only five of Nasdaq’s 100 components rising higher.
Due to the concerns, traders turned to risk-off assets for safety. They are currently focused on the U.S. and China relationship as President Donald Trump stated that he plans to end America’s reliance on the country. In addition, Trump threatened to punish any American companies that create jobs overseas.