Why did ASX 200 tech shares fall today?

The embattled technology sector had a grim start to the week.

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Key points

  • ASX technology shares slid into a sea of red today 
  • This followed a similar trend in the US tech-heavy NASDAQ 
  • Tesla CEO Elon Musk on Friday warned he had a "super bad" feeling about the economy 

ASX 200 tech shares are starting the week in the red, following a similar trend to the United States.

The S&P/ASX All Technology Index (ASX: XTX) dropped 1.75% today to finish at 2043.2 points. In comparison, the S&P/ASX 200 Index (ASX: XJO) fell 0.45% today.

Zooming in on the ASX tech sector, we see that Wisetech Global Ltd (ASX: WTC) was 2.33% lower at the close of trade today. The same story played out for Block Inc (ASX: SQ2), Altium Ltd (ASX: ALU) and NEXTDC Ltd (ASX: NXT), down a respective 3.18%, 2.01% and 1.99%.

So why did ASX 200 tech shares have such a bad day?

US tech shares slide

Tech shares in Australia have followed in the footsteps of their US counterparts. The Nasdaq-100 Technology Sector Index (NASDAQ: NDXT) dropped 2.81% in the US on Friday, its most recent day of trading.  

Microsoft Corporation (NASDAQ: MSFT) shares fell 1.66%, while Meta Platforms Inc (NASDAQ: FB) dropped 4.06%. Tesla Inc (NASDAQ: TSLA) shares plummeted a whopping 9.22%, and the Apple Inc (NASDAQ: AAPL) share price shed 3.86%.

Investors in US tech stocks appear to have reacted after high-profile Tesla CEO Elon Musk claimed he had a “super bad” feeling about the economy.

Further to this, the US job market tightened, fuelling speculation of further rate hikes, the Canberra Times reported. Chief ADP economist Nela Richardson was quoted as saying:

The market is trying to funnel its response through what the Fed may or may not do.

Meanwhile, back home, former technology darling Appen Ltd (ASX: APX) was booted out of the ASX 200 index today. The company’s share price dropped 3.28%.

Share price snapshot

The All Technology Index has dropped 24% over the 12 months, while it is trading 32% higher year to date.

The index has shed nearly 10% in the past month, and it has dropped 1.59% in the past week.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Altium, Apple, Block, Inc., and WiseTech Global. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has positions in and has recommended Block, Inc. and WiseTech Global. The Motley Fool Australia has recommended Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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