Technology stocks regained ground lost earlier in premarket trading Thursday, after getting clobbered by the worst day in over seven years on Wednesday.
U.S. consumer prices rose less than expected in September. The index, a key economic indicator released at 8:30 a.m. ET, showed underlying inflation appeared to slow down. Rising rates make high stock multiples of growth technology stocks less attractive because investors use U.S. government bond yields as their “risk-free” discount rate in financial models to value equities.
Shares of Netflix closed down 1.5 percent, moving off a decline of 2.7 percent in premarket trading. Amazon and Nvidia also both sunk, down 2 percent and 4.3 percent, respectively. Stock of Twitter and Facebook rose slightly, while Apple slid 1.9 percent.
Technology Select SPDR Fund, which tracks the S&P 500 technology sector, closed down 0.7 percent, recovering after being down as much as 1.4 percent in premarket. The SPDR Fund is down about 4.6 percent this week.
The S&P 500 Information Technology Index fell 4.8 percent on Wednesday, closing at $1,220.62, marking the biggest decline since August 18, 2011 when it dropped 5.3 percent.
The largest U.S. companies by market capitalization are among those falling in the tech sector. These stocks have also been the biggest contributors to the extended market rally. Apple and Amazon are both up sharply this year, as investors have bet the companies will continue to deliver earnings growth and gain greater market share.
Amazon and Netflix technically fall in different sectors but investors were selling anything tech-related in the current market rout.