It's been another rough day for the S&P/ASX 200 Index (ASX: XJO) so far this Friday. At the time of writing, the ASX 200 is down by a painful 0.52%, pulling the index down to under 7,170 points. But it's ASX 200 tech shares that are really feeling the pain today.
Tech shares are getting fried up this Friday, no way around it. Tech is one of the worst-performing ASX 200 sectors on the market today, only trailing ASX gold shares in losses.
Take the Block Inc (ASX: SQ2) share price. Block shares are presently down by a nasty 5.82% at $96.94 a share. Xero Limited (ASX: XRO) has slipped by 2.54% to $73.90 each, while Altium Limited (ASX: ALU) shares have lost 3% of their value to $36.46 a share. Appen Ltd (ASX: APX) has fallen by a depressing 4% to $2.52.
So why is the tech space getting singled out for some of the worst ASX 200 losses this Friday?
Why are ASX 200 tech shares getting fried up this Friday?
Well, it's not entirely clear. But it is likely that what is happening over on the US markets is to blame here. The US markets have been roiled this week by the US Federal Reserve's decision to raise interest rates by 0.5%.
Further, Fed chair Jay Powell made some hawkish comments that indicated that the Fed is far from finding an interest rate ceiling.
This decision, and accompanying comments from Powell, saw the US market tank, particularly the tech-heavy NASDAQ-100 (NASDAQ: NDX).
Higher interest rates are especially damaging for tech shares since many are priced on their future growth prospects, rather than their present profitability.
In last night's trading session, the NASDAQ crashed by a horrid 3.2%. So ASX tech shares were never going to have a rip-roaring kind of day today. That's the most likely explanation as to why tech shares are having such a disappointing end to the trading week this Friday.
