Global Stock Markets Drop After Wall Street Tech Selloff
Global stocks fell after a major selloff on Wall Street. Tech earnings disappointed, hitting markets in Asia and Europe. Investors worry about future growth
![Global Stock Markets Drop After Wall Street Tech Selloff](https://ishookfinance.com/uploads/images/202407/image_870x_66a2153a51bfa.webp)
Global stock markets fell sharply on Thursday following a major selloff on Wall Street. Tokyo's main index lost over 1,300 points at one point, closing down more than 3%, as global pessimism took hold.
European Markets Drop
Major European stock indices also fell:
-
France's CAC 40 dropped 1.5% to 7,400.08.
-
Germany's DAX declined 1.2% to 18,161.70.
-
Britain's FTSE 100 fell 1.1% to 8,066.27.
In the U.S., futures trading showed the S&P 500 expected to fall 0.2% while the Dow Jones Industrial Average was set to rise 0.2%.
Wall Street's Tech Stocks Hit Hard
U.S. stock markets saw their worst losses since 2022 due to disappointing earnings reports from Tesla and Alphabet. This ended the recent surge driven by excitement over AI technology. The S&P 500 fell 2.3%, the Dow Jones dropped 1.2%, and the Nasdaq tumbled 3.6%.
Asian Markets Follow Suit
Asian markets were also affected, with Japan's Nikkei 225 falling 3.3% to its lowest close since April at 37,869.51. A stronger yen hurt Japanese exporters, leading to big drops in major stocks like:
-
Toyota Motor Corp., down 2.6%
-
Sony Group, down 5.4%
Other Asian markets saw declines too:
-
Hong Kong’s Hang Seng index dropped 1.7% to 17,021.91.
-
The Shanghai Composite fell 0.5% to 2,886.74.
-
South Korea’s Kospi declined 1.7% to 2,710.65 after the government reported a 0.2% economic contraction in the last quarter.
Technology stocks in the region were particularly hard hit, with Samsung Electronics down nearly 2%, Nintendo down 2.4%, and Tokyo Electron dropping almost 5%.
Currency and Energy Market Movements
In currency trading, the U.S. dollar slipped to 152.50 yen from 153.89 yen. The euro rose slightly to $1.0844 from $1.0841. The yen's rise is due to speculation that the Bank of Japan may soon increase its very low interest rates. However, some analysts, like Ipek Ozkardeskaya from Swissquote Bank, warn that the Bank might not raise rates, which could affect the yen's strength.
In energy trading, U.S. crude oil prices fell 59 cents to $77.00 a barrel, while Brent crude dropped 56 cents to $81.26 a barrel.
High Expectations for Big Tech
Investors had high hopes for big tech companies, known as the "Magnificent Seven" — Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. These companies have driven much of the S&P 500's gains this year, but now face pressure to maintain strong growth.
Tesla, a significant player in this group, saw its stock drop 12.3% after reporting a 45% fall in profits for the spring, missing analysts' expectations. Tesla's value is heavily tied to its AI projects, like its robotaxi initiative, which are hard to value due to uncertain timelines and success probabilities, according to UBS analysts.
Also Read: Tesla Stock Drops 10% After Mixed Q2 Results; Affordable EVs and Robotaxi Reveal Set for 2025