Software giant’s steep decline leads other internet and tech stocks as US Federal Reserve meeting begins.
On Tuesday, Microsoft fell sharply, with the software company leading a decline among megacap internet and technology stocks.
The shares fell about 4.1 per cent in their biggest intraday percentage decline since October 2020. The day’s drop erased more than $100 billion off its market valuation. Even with the decline, however, Microsoft remains up more than 45 per cent this year.
The day’s drop came on a broadly negative session for US stocks.
Among other notable names, Alphabet sank 2.9 per cent, Amazon declined 1.6 per cent, and Meta Platforms fell 1.4 per cent. Apple fell 1.4 per cent despite an upgrade from Bank of America.
Investors received another update on persistently rising inflation. The US Department of Labour reported that prices at the wholesale level surged by a record 9.6 per cent in November from a year earlier.
Businesses have been dealing with supply chain problems and higher costs for months. It has been a key concern for investors as big companies pass those costs off to consumers, who have so far been absorbing higher prices on everything from groceries to clothing and other consumer products.
On Friday, the Department of Labour reported that consumer prices had surged 6.8 per cent for the 12 months ending in November, the biggest increase in 39 years.
The discouraging reports on inflation precede the last two-day meeting of the US Federal Reserve this year, which started on Tuesday. The central bank is expected to speed up the process for trimming bond purchases, which have helped keep interest rates low and support the stock market and broader economy.
Investors are also monitoring the central bank for any statements on how soon it might raise interest rates in 2022.
Meanwhile, Wall Street is closely monitoring any news on the newest coronavirus variant that is spreading rapidly in the UK and some other regions.
It appears to cause less severe disease than previous versions of the coronavirus, an analysis of data from South Africa has shown. Pfizer’s vaccine seems to offer less defence against infection but still offers good protection from hospital admission.
(Except for the headline, this story has not been edited by The Finance World staff and is published from a syndicated feed.)
