The weeklong selloff engulfing technology stocks and cryptocurrencies showed no sign of slowing as weak jobs data exacerbated a rout spurred by concern over the impact of artificial intelligence on software valuations. Alphabet Inc. became the latest to drop after reporting earnings. Bitcoin took one of its biggest tumbles yet.
Heavy selling is starting to put a visible dent in equity benchmarks whose ascent had pushed valuations to some of the highest levels since the 2000 dot-com peak. The Nasdaq 100 has seen more than $1 trillion wiped out since last Wednesday, the day Federal Reserve policymakers signaled reluctance to lower rates again anytime soon.
While losses in previous sessions were confined mostly to growth sectors, Thursday saw a broadening of selling pressure, with 10 of the 11 biggest industry groups in the S&P 500 falling and about two-thirds of the index’s members in the red. Its equally weighted version — one that strips out market value biases — dropped from an all-time high.
Bets on economic resilience have recently fueled gains in companies that tend to benefit from improving growth prospects, the latest data underscored the uneven labor market characterized by limited numbers of overall dismissals and lackluster hiring.
“This week’s data has been discouraging,” said Bret Kenwell at eToro. “The latest labor figures reiterate that the US jobs market is not firing on all cylinders, a risk the Fed and investors will have to take seriously should further deterioration occur. Volatility could persist, particularly if near-term uncertainty increases.”
