The ASX has taken a tumble with the ASX down 1.2%, led by tech stocks which have crashed 4.4%.
Afterpay was the biggest loser, down 9.7%, its lowest level since August 2020. The other big loser on the ASX 200 was Pinnacle Investment Management Group Ltd down 10.79%.
In fact, six of the worst performers were tech stocks with Megaport and Life360 also hurting.
The index has lost 0.52% for the last five days, but sits 2.07% below its 52-week high.
This fall mirrors yesterday’s Nasdaq decline: Nasdaq dropped 3.1% compared with the S&P 500 which lost 1.9%.
Dow down after Fed hints at rate rises
Both the Nasdaq and Dow slipped after the Federal Reserve hinted that interest rates could be lowered sooner than expected.
Dow Jones Industrial Average shed 392.54 points, or 1.1%, to end at 36,407.11, its worst daily percentage drop since December 20, according to Dow Jones Market Data.
The S&P 500 fell 92.96 points, or 1.9%, closing at 4,700.58, its steepest daily percentage fall since November 26.
Nasdaq Composite Index tumbled 522.54 points, or 3.34%, finishing at 15,100.17, its sharpest daily percentage slump since February 25, 2021.
The drop has been blamed on ‘1980s like levels of inflation’, which are causing the Fed to take a more hawkish tone.
The Fed is now expected to raise rates quicker and cut its current $8.8 trillion sized balance sheet earlier than anticipated to combat higher costs of living.
“It was maybe confirming what people had worried about previously, and now it’s out there in black and white, on paper, for everyone to see,” director for equity income at Amundi US, John Carey, told MarketWatch.
“You can’t doubt it’s going to happen at this point. That reality is sinking in.”
Of inflation pressures, Carey said they could be eased by Omicron.
“The problem could be resolved if the economy slows with Omicron,” he said.
On the small cap front
Element 25 Ltd (ASX:E25) is 18.75% higher. E25 has had a strong start to operations at Butcherbird Manganese Project in 2022 with the Stage 1 production plant achieving a new daily production record of 1,209 tonnes on January 3, well above the target nameplate production of 1,000 tonnes.
Musgrave Minerals Ltd (ASX:MGV, OTC:MGVMF) is 0.59% higher. MGV has doubled down on a new, high-grade gold trend during a regional reverse circulation (RC) drilling campaign at the flagship Cue Gold Project in Western Australia.