In the early morning of February 6 Beijing time, U.S. stocks suffered a sharp correction, with the three major indexes closing down more than 1% for three consecutive days. Among them, the S&P 500 even erased all its gains since the beginning of this year, and market risk aversion continued to rise. The Dow Jones Industrial Average closed down 1.20% at 48,908.72 points; the Nasdaq Composite Index closed down 1.59% at 22,540.586 points; the S&P 500 Index closed down 1.23% at 6,798.40 points, led by small-cap stocks, with the Russell 2000 Index falling 1.8%.
Tech stocks became the hardest hit in this decline. Nine of the 11 major S&P sectors fell, and the Software Stock ETF plummeted 5%. Leading tech stocks generally came under pressure: Oracle fell nearly 7%, Microsoft fell nearly 5%, and Nvidia closed down 1.33%. Amazon performed the worst, plunging more than 10% after hours, dragging down the Nasdaq trend. It is reported that although Amazon’s Q4 financial report showed that AWS cloud business revenue exceeded expectations with a 24% increase, its full-year capital expenditure guidance reached $200 billion, far exceeding market expectations, triggering investors’ concerns about its cash flow.
The core inducement for this U.S. stock decline is the sluggish U.S. employment data. Data shows that U.S. JOLTS job openings in December hit a more than five-year low, far below expectations; Challenger enterprise layoffs in January reached 108,000, the highest level for the same period since 2009, a sharp increase of 205% month-on-month, reflecting that the U.S. labor market is weakening and triggering market concerns about a U.S. economic recession. In addition, the European Central Bank and the Bank of England successively kept interest rates unchanged and released dovish signals, which further affected the trend of global capital markets.
The follow-up trend of U.S. stocks will focus on the U.S. non-farm payrolls data (postponed to February 11), the performance of tech stock financial reports and the trends of global central bank policies. For investors, it is necessary to be alert to the risk of valuation correction of tech stocks and reasonably control positions.
