Stocks were on track for a losing month, and in a reinforcement of a central theme of the 2022 equity selloff, former early pandemic highfliers were feeling the worst of the pain.
They noted that Amazon.com Inc. AMZN, -1.47% on Tuesday became the third megacap index constituent, along with Facebook parent Meta Platforms Inc. META, -1.08% and Netflix Inc. NFLX, -2.57%, to finish below its closing low from the COVID crash in March 2020. In other words, the trio have erased their stratospheric post-COVID crash gains.
While Apple Inc. AAPL, -3.07% has fallen the least in the year to date in terms of change in the share price, it has lost the most in market cap at $844 billion. Amazon has seen its market cap fall the second-most at $843 billion, getting cut nearly in half. Tesla Inc. TSLA, +3.31%, along with Amazon, is one of two names to be ejected from the “$1 trillion market cap” club this year.
The Federal Reserve’s aggressive pace of interest-rate hikes in 2022 sent U.S. Treasury yields soaring. That gets much of the blame for the stock-market carnage this year, particularly for the megacap growth stocks that make up the FANG+ index. Growth stocks, whose lofty valuations were based on expectations for big earnings and cash flow far into the future, are particularly sensitive to rising yields. When Treasury yields rise, the value of those future earnings are more heavily discounted.
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