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Tech Stocks Fall as Moody’s Downgrade Triggers the ‘Sell America’ Trade

Tech Stocks Fall as Moody’s Downgrade Triggers the ‘Sell America’ Trade

Published: by Omor IE

Key Points

  • Tech stocks have trailed the broader market today.

  • The stock market has been spooked by Moody’s downgrading the U.S. credit rating.

  • Some individual stocks are still up big despite the broader market’s weakness.

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Tech stocks have underperformed the broader market so far today, as Moody’s downgraded the U.S. credit rating to Aa1 from Aaa. This means the U.S. no longer has the top-tier credit rating from any of the Big Three credit rating agencies. The ensuing spook has caused more volatile names, like tech stocks, to decline.

Some headlines have also reported that the “sell America” trade is back on. The sell America trade took shape after tariffs caused the stock market to plunge, but it largely dissipated as the stock market rallied in the past two weeks.

That said, it is likely hyperbole to claim the sell America trade is back in earnest. The stock market’s reaction hasn’t been too negative, and a downgrade from Moody’s was expected eventually since both Fitch and S&P downgraded earlier, and Moody’s remained the odd one out despite worsening metrics.

Here’s a market update as of 11:30 AM (ET) today.

  • The S&P 500 is down 20.79 points, or 0.35%.
  • The Nasdaq Composite is down 105.4 points, or 0.54%.
  • The Dow Jones Industrial Average is down 94.22 points, or 0.22%.

Major Tech Companies Underperform

With the exception of Microsoft (NASDAQ: MSFT), all the Magnificent Seven companies are in the red today.

  • Tesla (NASDAQ: TSLA) is the biggest loser today. It is down 3.2%.
  • Apple (NASDAQ: AAPL) is down 1.7%.
  • Alphabet (NASDAQ: GOOG, NASDAQ: GOOGL) is down 0.94%.
  • Nvidia (NASDAQ: NVDA) is down 0.5%.
  • Amazon (NASDAQ: AMZN) is down 0.2%.
  • Meta Platforms (NASDAQ: META) is down 0.2%.

Notable Losers Today

The number of companies making big moves in the double digits is down considerably. This is due to earnings season being largely behind us.

  • Quantumscape (NYSE: QS) is down 14.5%. This is due to The Wall Street Journal reporting that its partner General Motors (NYSE: GM) is reversing on its EV-friendliness.
  • Aeva Technologies (NASDAQ: AEVA) is down 14.4% as it is cooling off from a massive rally.
  • Archer Aviation (NYSE: ACHR) is down 11.4%. Again, this is due to the momentum cooling off.
  • AST SpaceMobile (NASDAQ: ASTS) is down 8.8%.
  • Quantum Computing (NASDAQ: QUBT) is down 7.6%.

Other tech-related stocks are also down notably due to the sector showing more weakness recently.

Notable Gainers Today

  • NWTN (NASDAQ: NWTN) is up 69.4%. It recently appointed Benjamin Zhai as its Global Chief Executive. This person was previously the CEO of Canoo China.
  • TMC the metals company (NASDAQ: TMC) is up 21.4% as President Donald Trump’s executive order on undersea mining has triggered a “gold rush”.
  • Sable Offshore (NYSE: SOC) is up 18.5% as it restarts oil production and Santa Ynez. Price target was lifted to $40 at TD Cowen.
  • Novavax (NASDAQ: NVAX) is up 15.4% after the FDA approved its COVID-19 vaccine.
  • Paramount Group (NYSE: PGRE) is up 13.6%. It recently “initiated a comprehensive review of strategic alternatives to maximize shareholder value.”

NMAX, GLXY, DGNX, QBTS, ZIM, RYAAY, and FUBO are all up by the high single digits.

The image featured at the top of this post is ©s-cphoto / iStock via Getty Images.

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