Angela Weiss/AFP via Getty Images
Updated at 5:12 p.m. ET
Stocks experienced their worst day since June, with a sudden plunge in big tech shares like Apple and Amazon driving the S&P 500 index down 3.5% and the Dow Jones Industrial Average down 2.8%.
The dizzying drop in prices follows a string of record-high trading days, largely fueled by a few superstar tech stocks, such as Facebook, Apple and Amazon.
It was those same high-flying tech companies that led the drop in the market, with Apple down by 8% and Microsoft losing more than 6%. The electric car maker Tesla, which has become a favorite of day traders, lost 9%.
Analysts said the market was simply taking a pause after climbing for months.
“The stock market has run a long way in a short amount of time, particularly in the technology sector. A pause to catch its breath is normal and healthy,” said Greg McBride, chief financial analyst at Bankrate.com.
“This market has been due for a pullback. Actually, overdue,” he added.
The plunge in tech stocks sent the Nasdaq composite index down by 5%. One day after finishing above 29,000 for the first time since February, the Dow lost 808 points.
Conversely, some of the stocks hardest hit by the pandemic shutdowns, such as Macy’s and Carnival Cruise Line, rose sharply.
The volatility in the market comes at a time of ongoing concern about the pandemic’s impact on the economy. On Friday, the Labor Department is scheduled to release the much-anticipated August jobs report, which is expected to show a decline in unemployment although it remains high by historical standards.