Investors dumped technology shares and drove all US stock market indices sharply down after the previous day’s high note. Oil and gold also dropped, as analysts struggled to explain the cause behind the sell-off.
The Dow Jones Industrial Average dropped by over 1,000 points before bouncing back on Thursday, closing down 808 points at 28,292.73, for a 2.8 percent loss. The S&P 500 dropped 3.5 percent to close at 3,455.06, while the Nasdaq composite was down five percent, at 11,458.10.
It was the worst single-day loss for Dow and S&P since June, and the biggest drop for the Nasdaq since March. The decline was driven by the FAANG group – Facebook, Apple, Amazon, Netflix, and Google’s parent Alphabet – sliding from historically high stock valuations at the start of September.
Despite the increased reliance on computers as the Covid-19 pandemic drags on, all tech stocks took a beating. Processor maker AMD, graphics card manufacturer Nvidia, and even the makers of ubiquitous teleconferencing software Zoom saw their shares drop throughout the day.
The drop follows Wednesday’s 455-point “surge” for the Dow. A Nasdaq correction was more or less “understandable,” given that many of the companies listed are at “absurd valuations,” David Bahnsen, chief investment officer at the California-based Bahnsen Group, told Yahoo Finance.
Gold had dropped to $1,922 per ounce before climbing back up during the day. Oil futures were also down, with Brent crude at $43.15 and WTI crude at $40.22 a barrel.
“There were no major headlines or obvious triggers for the plunge, but it’s left investors wondering if the day’s drop signals another historic market event, or just a little in-flight turbulence,” Lindsey Bell, chief investment strategist at Ally Invest, told Business Insider.
Do you notice that any time Fake News Suppression Polls are put out, like @FoxNews, the Stock Market goes DOWN. We are going to WIN!
— Donald J. Trump (@realDonaldTrump) September 3, 2020
President Donald Trump has reacted to the news by suggesting that the drop in markets has something to do with the polls published by Fox News, in which his Democratic rival Joe Biden appeared to have a lead over him in key states.
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