Stocks fall after brief reprieve from tech-driven losing streak

Stocks closed with another round of losses Wednesday as a selloff in technology shares returned following a day of gains.

The Dow Jones Industrial Average closed with a loss of 525 points Wednesday, falling 1.9 percent on the day. The S&P 500 index fell nearly 2.4 percent, and the tech-heavy Nasdaq composite sank 3 percent.

After snapping a losing streak Tuesday, the stock market fell back into the broad decline that has haunted investors for much of September. Shares of major technology companies that rallied steadily through spring and summer have declined sharply this month, dragging the major indexes down with them.

Tesla shares plunged 10.3 percent Wednesday, leading the market in losses. Shares of Apple, Netflix and Amazon all fell roughly 4.2 percent, and Microsoft fell roughly 3.2 percent.

“The fortunes of the broader market have been tied to those of Big Tech for some time now. Investors have moved into those names as the pandemic has accelerated the shift toward working, playing, and learning from home even as other types of companies, such as travel and dine-in restaurants, have suffered,” wrote JJ Kinahan, chief market strategist at TD Ameritrade.

“While Big Tech has helped elevate the market, it has also created some choppiness as investors have begun to wonder about potential overvaluation.”

The three major U.S. stock indexes have taken losses in three consecutive weeks after a torrid rally that helped the S&P and Nasdaq set new record highs. Along with concerns about a tech stock bubble, investors have also been shaken by the fading chances of another fiscal stimulus deal before the election and rising coronavirus cases across Europe that have prompted some countries to reimpose social distancing and business restrictions.