The S&P/ASX 200 Index (ASX: XJO) is a sea of red on Wednesday morning.
In early trade, the benchmark index is down a very disappointing 2.6% to 6,829.5 points.
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Why is the ASX 200 index being sold off?
Investors have been selling off ASX 200 shares on Wednesday following a shocking night of trade on Wall Street which saw the Dow Jones fall 3.9%, the S&P 500 drop 4.3%, and the Nasdaq sink a massive 5.2%.
This was the worst night of trade on Wall Street since June 2020 and was driven by panic selling from investors after economic data revealed that US inflation failed to cool during August.
Investors had been optimistic that inflation had peaked and interest rates would not need to increase as aggressively as feared. However, that has been thrown out of the window now, with the market bracing for higher rates.
The worst performers on Wall Street were tech stocks, with Meta and Nvidia falling particularly heavily.
Unsurprisingly, this has led to our own tech sector coming under significant pressure today. The likes of Life360 Inc (ASX: 360), Block Inc (ASX: SQ2), and Zip Co Ltd (ASX: ZIP) have all fallen materially this morning. This has led to the S&P/ASX All Technology Index dropping a sizeable 3.9%.
But it isn't just the tech sector that is falling. ASX 200 shares in the resources sector, such as BHP Group Ltd (ASX: BHP), Fortescue Metals Group Limited (ASX: FMG), and Pilbara Minerals Ltd (ASX: PLS), are also deep in the red this morning.
Even the banks are taking a bath on Wednesday. This has seen the Commonwealth Bank of Australia (ASX: CBA) share price lose 3% of its value in early trade.
While these declines are hard to take, when the dust settles, there could be some very attractive buying opportunities for investors.
