Sell-off in tech stocks eases as investors mull earnings growth
Attention turns to Fed policy meeting on Wednesday
Photograph: Chris Jackson/Getty Images
A sell-off in technology shares that began Monday in Asia and picked up pace in the US began to ease Tuesday, as investors mull the potential for weaker earnings growth among companies that have led gains over the past year.
Stocks came off their lows of the day in Tokyo, and were up in Seoul Tuesday afternoon, while China’s markets were little changed as that nation wrapped up an annual meeting of its legislature. Investors may be less willing to make take big positions ahead of the Federal Reserve’s policy meeting Wednesday, where focus will be on whether policy makers signal an acceleration in interest-rate hikes. Also on the horizon are potential tariff announcements by the Trump administration on China. The yen slipped, while Treasuries were little changed.
Deepening concerns about privacy protection have spurred calls for executives from companies like Facebook, Twitter and Alphabet’s Google to testify before Congress. The European Union has also been stepping up scrutiny of digital giants. On top of that, the tech sector - along with automobiles - would be among the most vulnerable to supply-chain disruptions from any trade war, Morgan Stanley’s Jonathan Garner said on Bloomberg Television Tuesday.
Even so, futures on the Nasdaq 100 were only down slightly as of Tuesday afternoon trading in Asia. Elsewhere, West Texas Intermediate oil prices climbed, and gold was little changed.
Next up is Fed chairman Jerome Powell’s first policy meeting at the helm of the central bank. Some on Wall Street expect the median projection of Fed officials to rise to four at Wednesday’s meeting, while others say there will be no change following a round of mediocre data and policy makers’ stated intentions to move gradually. - Bloomberg