It’s another white-knuckle day for investors in S&P/ASX 200 Index (ASX: XJO) tech shares.
A good reminder, perhaps, not to get too caught up in the daily price swings and keep your eye on your long-term investment goals.
But with our own eyes glued to the trading screens at the moment, we can’t help but note the big retreat among ASX 200 tech shares.
Today’s sell-off is hitting almost every corner of the market, with the ASX 200 down 1.6% at the time of writing.
Tech shares are faring worse, with the S&P/ASX All Technology Index (ASX: XTX) down 2.43%.
Only one ASX 200 tech share is in the green
The sole ASX 200 tech share that’s shrugging off the selling action is Pro Medicus Limited (ASX: PME).
Shares in the healthcare imaging software and services provider are up 1.84% to $40.97.
The other big-name stocks aren’t faring quite as well.
Meanwhile, global payments giant Block Inc (ASX: SQ2) has seen its shares fall 3.19%, following a 3.3% drop in its US-listed shares yesterday (overnight Aussie time).
Why the big tech sell-off?
ASX 200 shares are under selling pressure today following the biggest single-day losses in US markets posted in almost two years.
The S&P 500 Index (SP: .INX) finished the trading day down 4% while the tech-heavy Nasdaq Composite (NASDAQ: .IXIC) lost 4.7%. European markets broadly retreated as well, with the German Dax Performance Index dropping 1.3%.
The selling in international markets and among ASX 200 tech shares comes as investors remain concerned and uncertain about fast-rising prices across most Western nations, and the resulting interest rate rises needed to keep that inflation in check.
Slowing retail sales figures out of the US are also pointing to the increasing possibility the world’s biggest economy could be heading for a recession.
Commenting on the latest market falls, Carl Ludwigson, managing director of Bel Air Investment Advisors, said (quoted by Bloomberg):
The threat to asset prices is broad-based inflation pushing central banks to tighten monetary policy even more rapidly. If the Federal Reserve’s policy response proves too aggressive, then Treasuries and high-quality municipal bonds will again be the place to hide as tighter financial conditions lead to demand destruction.
With ASX 200 tech shares often priced with future earnings in mind, they’re particularly sensitive to investor fears over aggressive interest rate rises.
Of course, five or 10 years from now, this will all likely just be a bump in the road.