US stocks sink as tech optimism fades

NEW YORK – US stocks slumped on Friday as the recent enthusiasm for tech stocks waned, filtering through into a broader market decline.

Traders were also grappling with the late-night announcement on Thursday of a strike by United Auto Workers (UAW), a union that represents workers at three major auto manufacturers.

However, the immediate impact of the strike on the financial markets is likely to be subdued, according to CFRA chief investment strategist Sam Stovall.

“The UAW strike had been predicted for quite some time so I don’t think it’s really that much of a surprise to anybody,” he told AFP.

The Dow Jones Industrial Average ended the day down 0.8 per cent at 34,618.24.

The broad-based S&P 500 declined 1.2 per cent to 4,450.32, while the tech-rich Nasdaq Composite Index slumped 1.6 per cent to 13,708.33.

Among individual firms, the British chip designer Arm saw its share price decline almost 4.5 per cent on its second day of trading as a public company, but remained firmly above its pre-trading valuation.

The US financial markets have also been looking ahead to next week’s Federal Reserve interest rate decision, with broad expectation that the US central bank will hold its key lending rate steady, while leaving the door open to another hike later this year.

“The Fed is probably not going to do anything next week, but that does not mean that they won’t raise rates again in November,” Mr Stovall said. AFP


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