“Tech Stocks PLUNGE: The Start of an Unforgettable 2024

2024 got off to a rocky start for most technology stocks this week, as markets dropped sharply in response to a wide array of economic, political and technological developments. The Dow Jones Industrial Average (DJIA) experienced its biggest daily drop since February 2020 as investors reacted to various political, economic and technological developments. On Monday, the DJIA fell by nearly 700 points, the second-largest drop of the day, reflecting concerns about the growing macroeconomic situation both nationally and globally. The decline was even more acute in the tech sector, with tech stocks such as Apple, Microsoft, Amazon, and Google parent Alphabet all significantly lower by the end of the trading day. The declines come as tech stocks have experienced a meteoric rise in recent months, with the NASDAQ Composite setting all-time highs. This is believed to have been driven by the anticipation of major technological advancements such as quantum computing, 5G networks, and artificial intelligence. However, analysts are now cautioning against overly-optimistic expectations, citing concerns over competition, privacy concerns, and long-term sustainability. These concerns have been especially pronounced this week, as a series of emerging developments have caused investors to rethink their approach to technology stocks. The first is the US-China trade war, which has caused already-tense relations between the two nations to further worsen this week, as China announced a new round of tariffs on $75 billion worth of US goods. These tariffs are believed to have an especially large impact on global technology firms, as China is home to many of their global suppliers and potential customers. Second, a report from the US National Security Agency (NSA) outlining the dangers of heavily relying on Chinese-made technology has also increased anxiety among investors. The report states that Chinese tech firms being involved in US technology is a “threat” to national security and could create a “back door” for the Chinese government to gain access to confidential information. Third, the US Department of Justice recently announced that it was suing Apple for over $1.2 billion for allegedly violating US anti-trust laws by monopolizing app store markets. This lawsuit could have major implications for the tech giant’s business model, which relies heavily on its App Store. Finally, the European Union is set to launch a new Digital Services Tax (DST) on December 31, which could potentially hit tech giants clustered around the world’s most valuable global markets. These events and developments have prompted many investors to re-evaluate their portfolios and take a more cautious stance on technology stocks. Many believe that while these companies are set to benefit from major technological advancements, near-term risks are significantly higher than previously expected. It remains to be seen whether technology stocks will be able to rebound in the coming weeks and months.