In just three trading days, the market value of American technology giants has shrunk by more than $1 trillion. Since the Fed raised the benchmark interest rate on Wednesday, the market has generally been sold off, but the technology sector has suffered more than other sectors. Apple, the world's most valuable listed company, has lost $220 billion in market value since its closing on Wednesday.
On the same day, US Federal Reserve Chairman Powell announced that US inflation was too high and there was no plan to raise interest rates by 75 basis points at one time.
The market rose first because of Powell's remarks, but in the next few days, the optimism disappeared. U.S. stocks have fallen sharply for three consecutive trading days since last Thursday. The S & P 500 index fell below the 4000 point mark on Monday, down 7% since the close of last Wednesday, and Jingshun Nasdaq 100 ETF fell nearly 10% in the same period.
The following are the market value losses suffered by other technology giants in the past three trading days:
Microsoft has lost about $189 billion in market value;
A few months after the market value fell to less than $1 trillion, Tesla's market value fell by $1990 billion;
Amazon's market value has shrunk by $173 billion;
The market value of Google parent company alphabet decreased by $123 billion compared with last week;
NVIDIA lost $85 billion in market value;
Meta platforms, Facebook's parent company, has lost $70 billion in market value.
The semi annual financial stability report released by the Federal Reserve on Monday warned that the liquidity situation in major financial markets had deteriorated due to the rising risks brought by the Russian Ukrainian war, monetary tightening and high inflation.
"According to some indicators, the liquidity of the new US spot treasury bond market and stock index futures market has declined since the end of 2021," the report said.
"Although the recent liquidity deterioration is not as extreme as in some past periods, the risk of sudden and significant deterioration seems to be higher than normal," the report said. "In addition, since the conflict between Russia and Ukraine, the liquidity of the oil futures market has sometimes been tense, while some other affected commodity markets have obvious dysfunction."
In a press release accompanying the report, fed governor Brenner said that the war "triggered sharp rises and falls in commodity prices and margin calls, and highlighted the potential channels through which large financial institutions could be infected."
"From the perspective of financial stability, since most participants enter the commodity futures market through large banks or brokerage dealers that are members of the relevant clearing house, these clearing house members will be at risk when customers face abnormally high margin calls," brennard said. "The Fed is working with domestic and foreign regulators to better understand the risk exposures of commodity market participants and their linkages with the core financial system."
The S & P 500 fell to its lowest level in more than a year on Monday and is now nearly 17% below its record high on January 3. The fall in asset prices comes as central banks around the world, including the Federal Reserve, are sharply tightening monetary policy to deal with persistent inflationary pressures.
"High US inflation and rising interest rates may have a broader negative impact on domestic economic activity, asset prices, credit quality and financial conditions," the report said. The report also warns that US house prices are overvalued, making them particularly sensitive to shocks.