It's a sea of red for S&P/ASX 200 Index (ASX: XJO) tech stocks today.
In morning trade on Tuesday, the ASX 200 is down a sharp 1.0%.
But tech shares are doing it tougher.
At the time of writing, the S&P/ASX All Technology Index (ASX: XTX) – which also contains some smaller technology-focused companies outside of ASX 200 tech stocks – is down 2.0%.
Narrowing our scope to five of the biggest listed Aussie tech companies, here's how they're tracking today:
- Shares in cloud-based software solutions provider WiseTech Global Ltd (ASX: WTC) are down 1.6% at $89.11. The WiseTech share price is down 7% in a year.
- Shares in software-as-a-service provider Technology One Ltd (ASX: TNE) are down 2.5% at $29.52. The Technology One share price is up 75% in a year.
- Shares in data centre operator NextDc Ltd (ASX: NXT) are down 1.0% at $13.68. The NextDc share price is down 18% in a year.
- Shares in location-sharing software developer Life360 Inc (ASX: 360) are down 7.4% at $21.73. The Life360 share price is up 80% in a year.
- Shares in accounting software provider Xero Ltd (ASX: XRO) are down 1.1% at $171.74. The Xero share price is up 27% in a year.
So, why is the Aussie tech sector taking a dive today?
What's happening with ASX 200 tech stocks today?
ASX 200 tech stocks, and indeed the wider Aussie stock market, are following the lead of United States' markets and heading lower.
Overnight, the S&P 500 Index (SP: .INX) tumbled 1.8%.
And just as we're seeing here today, US tech shares took a steeper hit. The Nasdaq Composite Index (NASDAQ: .IXIC) ended the day down 2.6%, with generative AI chip making giant Nvidia Corporation (NASDAQ: NVDA) shedding 8.7%.
The headwinds came from several fronts.
First, the latest US housing, jobs, and consumer spending data released yesterday points to weaker growth ahead.
Second, US government bond yields rose, drawing money from equities, after President Donald Trump said export tariffs of 25% would be imposed on Mexico and Canada, commencing today. Trump also said exports from China would be hit with an additional 10% tariff increase.
On the back of this news, US tech companies and ASX 200 tech stocks look to be taking a harder hit amid a rotation from growth shares to value shares.
Trump's tariff gamble could rekindle inflation in the world's biggest economy and elsewhere and forestall any further interest rate cuts. Tech stocks, often priced with future growth in mind, are highly sensitive to the cost of money.
