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Facebook’s crash drops the Nasdaq index by 2%… and stocks suffer severe losses

US stocks fell at the close Monday, as selling resumed in technology shares due to the continuing threat of high inflation and the outage that hit Facebook, Instagram and the instant messaging application WhatsApp.

The S&P 500 was down 1.3% – down from its 100-day average – while the Nasdaq 100 was down 2.2%, and the Dow Jones Industrial Average was down 0.9%.

Losses were led by high-growth technology companies – including Amazon and Facebook, while vaccine makers also fell after Merck & Co. An effective drug for the Corona virus. Meanwhile, energy stocks rose along with oil prices.

The value of Facebook declined by 4.9% due to the disruption of site services, while Twitter’s stock fell 5.79%, while Amazon’s stock fell by 2.85%.

We have an energy crunch, supply chain issues, higher inflation, signs of weak growth and a lot of talk of stagflation,” Deutsche Bank strategist Jim Reed said in a note.

Global markets took a risky turn amid a growing list of concerns, just as investors were preparing for the Federal Reserve’s start of stimulus cuts early next month. High rates of inflation and Treasury yields make premium investors paying for high-growth stocks less attractive. Earnings risk may also be higher for some technology companies.

“Tech stocks are likely to be hit the hardest because higher interest rates mean higher discount rates for future earnings,” said Brian Price, head of investment management at Commonwealth Financial Network.

Fears of a spreading energy crisis also added to concerns about inflation on Monday as energy and gas prices rose in Europe ahead of the onset of winter. The November electricity contract in Germany hit a record while natural gas futures continued to rise. Meanwhile, New York crude oil rose to its highest level since 2014 as OPEC+ agreed to increase production for the month of November.

“The post-pandemic recovery appears to be faltering; tight supplies and a worsening energy crisis mean prices are going up and high inflation may not be as temporary as the Fed initially thought,” said Fiona Cincotta, chief financial markets analyst at City Index.

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