Amazon’s biggest one-day drop since 2006 caps disastrous month for tech

US stock market has come under heavy pressure in April amid tumultuous earnings and Fed policy concerns

Traders work in the New York Stock Exchange on Friday. The tech losses were so widespread in April that even companies that reported good results weren’t spared. Bloomberg

Amazon shares collapsed on Friday, with a loss in market value that ranks as one of the worst in Wall Street history after it offered an outlook that was considered to be disappointing.

The stock sank 14 per cent in its biggest one-day drop since July 2006, with shares closing at their lowest level since June 2020.

The sell-off erased $206.2 billion from the company’s market valuation, an amount exceeded only by Meta Platforms, which dropped $251.3bn in market value after a disastrous report of its own in February.

The slump was the latest hit to the biggest names in the US stock market, which came under heavy pressure in April amid a tumultuous earnings season and concerns over Federal Reserve policy.

The Nasdaq 100 Index fell 4.5 per cent on Friday, bringing its April decline to 13 per cent, its biggest one-month drop since October 2008.

“Things are so weak you want to hide under your desk,” said Michael Matousek, head trader at US Global Investors.

“People are coming to the realisation that the easy money is over. There are concerns about rates going higher, about Covid, the war and now you’re seeing weakness in the tech titans that led everything up for so long.”

Amazon fell 24 per cent for the month, its biggest one-month percentage drop since November 2008.

Alphabet, which has reported weak first-quarter revenue, dropped 18 per cent in April, also its worst since November 2008.

Among other names, Apple fell 9.7 per cent for April, its biggest one-month drop since September 2020. Shares fell 3.7 per cent on Friday after it reported its results and issued a warning about the effect that supply constraints would have on revenue.

The tech losses were so widespread in April that not even companies that reported good results were spared.

Microsoft fell 10 per cent in April, its worst one-month decline since January 2015, even after it reported results that were considered to be strong.

Meta Platforms fell 9.8 per cent in April, even with a sharp increase after results on Thursday.

“Rising cost pressures and uncertain outlooks from the largest technology names have investors agitated going into the weekend," said Charlie Ripley, senior investment strategist for Allianz Investment Management.

“Investors are not likely to be comfortable any time soon, with the Fed widely expected to deliver a 50 basis point hike along with a hawkish message next week.”