U.S. stocks slumped Thursday in the financial markets’ biggest meltdown since 2020, with tech companies taking a harder hit than the media sector in a dramatic reversal of the previous day’s rally.
The Dow Jones Industrial Average shed 1,063.09 points, down 3.1% for the day, its biggest drop since October 2020. The tech-heavy Nasdaq Composite index cratered 5%, down 647 points, its lowest point since November 2020 and marking one of its biggest one-day declines since the outset of the pandemic earlier that year.
The market volatility came after the Federal Reserve on Wednesday OK’d an interest rate increase of half a percentage point in an attempt to slow the rate of inflation. That news pushed stocks higher, only to have those gains wiped out by Thursday’s pullback amid concerns the Fed might soon raise the interest rate again.
Overall, big tech fared worse than media companies in Thursday’s major sell-off. Netflix, already suffering huge drops in market value this year after missing subscriber estimates, sank 7.7%, dropping to a new four-year low of $188.32/share. Streaming platform company Roku saw its stock fall 6.9%, to $102.45/share.
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Amid the carnage, one outlier was Twitter, whose shares closed up 2.8%, to $50.41/share, after Elon Musk said he had secured an additional $7.1 billion in equity financing to execute his $44 billion takeover of the company. That is still 7% lower than Musk’s $54.20/share bid.
Tech losers on the day included Snap (-9.6%), Amazon (-7.6%), Meta (-6.8%), Apple (-5.6%) and Alphabet (-4.8%). Shares of Redbox, the DVD rental kiosk and streaming company, plunged 18.7%.
Among media stocks, Warner Bros. Discovery fell 4%, Disney and Comcast (which owns NBCUniversal) both skittered down 3%, Fox Corp. was off 1.9% (Class B shares), and Paramount declined 1.5%.