Tech Stocks Plummet Amid Escalating Conflict and Inflation Fears
US stocks plummeted on Thursday, with the S&P 500 index dropping 1.2% and the Nasdaq 100 index falling 1.9%. The tech sector, represented by the 'Magnificent Seven' stocks, suffered its worst single-day performance since April 2025's tariff storm, losing around $800 billion in market value.
The ongoing Middle East conflict has driven up oil prices, with Brent crude surpassing $100 per barrel. This escalation has fueled inflation concerns and raised expectations of a Federal Reserve rate hike next week.
Tech giants' earnings revealed massive AI capital expenditures, causing negative free cash flow for companies like Google and Tesla. Investors are questioning the return on these investments, leading to a sell-off in high-valuation tech stocks.