Tech Industry Stocks Are Fueling A Drop In The Markets
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Stock prices plunged again today. The Dow Jones Industrial Average has fallen 950 points in the past two days, or almost 4 percent. And all of the major stock market indexes are now down for the year. NPR's Jim's Zarroli explains what's going on.
JIM ZARROLI, BYLINE: The U.S. economy may be doing nicely right now, thank you. But stock market investors are looking into the future, and they don't like what they see.
One big problem is trade. Both China and the United States are imposing tariffs on each other, and investors are wondering whether they'll be able to work out their differences. Gregory Daco is chief U.S. economist at Oxford Economics.
GREGORY DACO: I think we're gradually seeing the rising trade tensions between the two economic giants that are the U.S. and China having an effect on business confidence and having an effect on supply chains across the world.
ZARROLI: And that's hurting lots of big companies, like Boeing and Caterpillar, that export a lot. But the real bloodbath has been in tech stocks.
Apple and Facebook used to single-handedly prop up stock prices. Today, a lot of investors are rethinking tech. Apple in particular is down about 20 percent this month alone. Tech companies depend on foreign markets, and there are signs that trade tensions are slowing growth in Europe and China.
Meanwhile, the U.S. Federal Reserve keeps raising interest rates. That slows down economic activity, and Quincy Krosby of Prudential Financial says that has been spooking the markets.
QUINCY KROSBY: It became clear to the market that the Fed was basically going to be raising those rates almost regardless of the effect on housing, on vehicle sales, on credit card rates, on, you know, overall consumer confidence.
ZARROLI: The prospect of a slowdown in growth usually does something else as well. It causes oil prices to fall. And that is happening.
Today, oil fell to its lowest level in a year. And the big energy stocks were all down. Jim Zarroli, NPR News, New York. Transcript provided by NPR, Copyright NPR.