In the last couple of days, the tech sector on the market has seen a bearish movement. Question is, is the uptrend over? Or is this just a minor, expected correction?
The Technology and internet sector is putting the Nasdaq Composite index on the verge of registering its worst week in more than five months.
The “Tech Wreck” comes soon after Nasdaq reached a record above the important round-number mark at 8000 on August 29, and it has raised some questions about the ability of the broader market, which has been mostly fueled by gains in the sector, to achieve new heights.
Up until the last couple of days, the tech sector has been leading the market higher and nearly doubling the 12-month return of the S&P 500.
The recent break in the uptrend is nothing to worry about according to Art Hogan, the chief market strategist at B.Riley FBR inc.
He sees this more like a healthy reminder to investors, that momentum moves both ways, referring to the rise in investments strategies of buying stocks on the expectation that they will continue their uptrend over the medium term.
The negative mood on the market is partially caused by the fear of an escalating trade-war, as many expect the US to decide on new tariffs on imports of goods from China with a value of $200 billion.
Among the Tech stocks, Apple saw a decline of 1,6% while Facebook falls with 3,0% and Alphabet ( Google parent company ) sees a decline of 2,1 %.
Investors in the tech sector are experiencing a sales pressure, caused by the fear from investors concerning regulation of the big social media platforms after a hearing in the US Congress. Wednesday, the hearing in Congress focused on foreign involvement in the US presidential election, especially through social media. On top of that, the US president Donald Trump have on several occasions criticized Twitter, Facebook, Google and Amazon.
Twitter continues its decline from Wednesday with 5,3 % and Netflix falls with 6,1 % on Wednesday but gets its price target raised on Thursday from $360 to $444 by the Canadian finance House RBC.
Among the sectors with pluses is industry gaining 0.3 percent. in S&P 500, while real estate and utilities increased by 0.3 to 0.4 percent.