Ouch: Tech and media stocks are getting hammered

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Yesterday the NASDAQ index fell 5%, its biggest one-day decline since 2020, as the list of stocks with eye-watering losses got a little bit longer.

Most notable yesterday was e-commerce darling Shopify, which fell 15% after posting its slowest revenue growth in 7 years, leaving its shares down 70% this year, worse even than Netflix's high profile meltdown, which has seen its shares fall 69%.

Indeed, of the 192 large stocks in the Technology and Communication Services sectors, 167 are down this year. The only notable exception? Twitter — thanks to Elon Musk's bid for the company that was way ahead of where the shares were trading.

What's changed?

Everything just seems to be slowing down. The pandemic accelerated a lot of digital transformation, and investors, who were flush with cash from monetary and fiscal stimulus, rushed into tech stocks. With interest rates finally rising, inflation at 40-year highs and growth slowing, a lot of those companies are just on a less attractive trajectory than they were 6 months ago.

It's not just tech

As the fastest-growing part of the market, tech stocks usually whipsaw around more than other industries — and they are bearing the brunt of this sell-off — but it hasn't been a tech exclusive event. The S&P 500 index is now down 14% on the year, and every sector has lost ground — except Energy &Utilities.

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