Investors pull back from tech as recession fears and trade concerns drive the Nasdaq to a six-month low
US technology stocks faced a sharp decline on Monday, with the Nasdaq marking its worst drop since 2022.
According to CNBC, the seven most valuable tech companies lost over US$750bn in market value as investors reacted to concerns about a potential recession and trade tensions.
The selloff intensified across the sector, pushing the Nasdaq to a six-month low.
Tesla recorded the largest percentage drop, plummeting 15 percent—its worst single-day decline since 2020. The electric vehicle maker has now lost over half its value since mid-December, with its market capitalization falling by US$130bn on Monday alone.
Nvidia, which has seen its value decline by nearly a third since reaching a peak in January, dropped 5 percent, erasing almost US$140bn in market capitalization.
Apple led the megacap losses, shedding approximately US $174bn in value.
Microsoft and Alphabet lost US$98bn and US$95bn, respectively, while Amazon dropped US$50bn and Meta saw a US$70bn decline.
CNBC reported that Alphabet and Meta shares both fell over 4 percent, while Microsoft and Amazon declined by at least 2 percent each.
The Technology Select Sector SPDR Fund fell more than 4 percent, officially entering correction territory with shares now over 14 percent below their peak.
The semiconducor sector has been particularly affected, as it remains a target for new trade policies.
The VanEck Semiconductor ETF has dropped 3 percent in the past week and is now down more than 16 percent since the latest inauguration.
On Monday, the ETF lost another 5 percent, with Marvell Technology tumbling 8 percent, while ASML Holding and Micron Technology fell more than 6 percent each. Broadcom lost 5 percent.
Last week, the US president announced an additional US$100bn investment from Taiwan Semiconductor Manufacturing, calling the company the “most powerful” in the world as part of efforts to strengthen domestic chip production.
According to Bloomberg, the Nasdaq 100 Index dropped 3.8 percent on Monday, wiping out more than US$1tn in market value.
The Bloomberg Magnificent 7 Index, which tracks the largest US tech stocks, fell 5.4 percent, bringing its total decline since December to over 20 percent.
Nvidia, Microsoft, and Apple had all reached valuations above US$3tn, while Amazon and Alphabet followed closely behind.
Tesla, which previously surpassed US$1tn in market value, has now lost nearly US $600bn so far in 2025.
For weeks, Wall Street has been shifting away from tech stocks toward defensive sectors due to uncertainty over US trade policy and persistent inflation.
The selloff accelerated after the Trump administration signalled a potential economic slowdown.
Over the weekend, former US President Donald Trump did not explicitly predict a recession but described the period as a transition
Treasury Secretary Scott Bessent referred to it as a “detox period” as the US moves away from public spending.
The speculative tech sector has also taken a hit. A group of profitless technology companies tumbled 6.6 percent on Monday, bringing their total decline for the year to 23 percent.
Bloomberg reported that the index is now on track for its worst quarter since 2022.
Market analysts indicate that investors are reassessing risk in the tech sector.
James Abate, chief investment officer at Centre Asset Management LLC, stated that the market is in the process of “de-risking,” noting that tech stocks had previously been “priced for perfection.”
