The U.S. stock market took its worst tumble in recent months, driven by steep declines in many of the technology firms that have been market leaders during the reopening rally.
The Dow Jones Industrial Average fell 808 points, or 2.78, to 28,293. A day earlier, investors had sent the Dow up above 29,000 for the first time since February.
The S&P 500 lost 3.5 percent. The tech-heavy Nasdaq Composite slid almost 5 percent. The smaller company index, Russell 2000, fell by nearly 3 percent.
The big tech firms have had a tremendous run this year. Shares of Apple, which fell 8 percent today, are up nearly 65 percent year-to-date. Shares of Tesla fell 9 percent on Thursday but are up 386 percent year to date. Google parent Alphabet’s shares fell five percent on Thursday but are up 22.8 percent year to date. Facebook shares, which are up 41.84 percent this year, fell 3.76 percent.
The steep sell-off on Thursday indicates that investors are not as sanguine about the future as they appeared to be this summer. Investors say attention has turned toward the election and Biden’s lead in the polls may be troubling given the leftward lurch of the Democrat Party in the past year or so. What’s more, hope for any further coronavirus aid legislation has faded. As well, ongoing social unrest—including a revival of urban riots and looting—may make further economic progress less likely.
Many Democrats have been saying that they think the economy may need to be shut down again to combat the coronavirus. That too may be worrying investors who have bid up the market as the economy reopened. Year to date, the S&P is up 22.36 percent.
All 11 sectors in the &P 500 dropped Thursday. Information technology was the worst-performing sector, falling 5.83 percent. Communication service, which is also tech-heavy, fell 3.34 percent. Consumer discretionary, widely seen as a bet on the reopening recovery, fell 3.56 percent.
The best performing sector, energy, fell 0.67 percent. The sector is down 37.7 percent for the year.
