(Bloomberg) — Technology shares led the biggest selloff in American stocks this year, as investors ditched longtime market leaders on rising worries the economy is headed for a recession.
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The S&P 500 sank 2.6%, with tech companies in the index sinking as much as 4.7% at some point. The Nasdaq 100 Index plunged 3.8%, the most since 2022. It’s now down 12% from a Feb. 19 record. Monday’s selling wiped out more than $1 trillion in the gauge’s value.
Tesla Inc. tumbled 14%, widening its loss this year to 43%. Nvidia Corp. lost 5% and has erased more than $1 trillion in market value in two months. Bloomberg’s index of the Magnificent Seven tech stocks – which also includes Alphabet Inc., Amazon.com Inc., Apple Inc., Meta Platforms Inc. and Microsoft Corp. — sank 5.8% Monday, and is now down 16% in 2025.
The tech wreckage comes after a weekend that saw Trump administration officials and President Donald Trump himself suggest that the American economy is set to slow. The change in language from the campaign trail, when Trump promised tariffs on Day One that would pay for tax cuts without disrupting the growth, has sparked a frenzied repricing of risk assets.
“Sell your winners, embrace the bear case and duck and cover,” said Michael Bailey, director of research at Fulton Breakefield Broenniman.
By virtually any accounting, the winners have been megacap tech. Nvidia and Apple soared to valuations north of $3 trillion, Meta and Microsoft weren’t far behind. Even Tesla saw its market worth top $1 trillion.
For weeks, Wall Street had been cautiously moving from tech to more defensive sectors as on-again, off-again trade policies unnerved investors at the same time inflation proved sticky. That rotation accelerated Monday after unnerving comments on growth over the weekend.
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The selloff has been even more extreme in the speculative corners of the market. A basket of profitless technology companies tumbled 5.3% on Monday and is down 14% this year. The gauge is on pace for the worst quarter since 2022.
When asked whether he’s expecting a recession this year, Trump said, “I hate to predict things like that. There is a period of transition, because what we’re doing is very big.” And on Friday, Treasury Secretary Scott Bessent talked about “a detox period” as the US moves away from public spending.
