Market week: Stock indexes sink on tech selloff

Nasdaq drops to correction territory

The major North American stock indexes posted a losing week, with the Nasdaq Composite Index dropping into correction territory as investors sold off major technology issues. The index had only just touched a fresh record high at the beginning of September before selling off precipitously, culminating in a 10% correction this week. The Nasdaq posted a 4.1% loss on the week, while the S&P 500 Composite Index retreated 2.5%.

The stock market losses came as a coronavirus relief bill stalled in the U.S. Senate with Democrats blocking the Republican-sponsored legislation. Adding to investor qualms was budget data from the U.S. Treasury Department, which saw the deficit surge over $3 trillion in August, with further increases likely before the end of the fiscal year on Sept. 30. However, U.S. inflation did see an increase, climbing to an annual 1.3% in August, from 1.0% in July, suggesting some success in government and central bank measures to stimulate consumer demand following the recessionary environment during the pandemic lockdown.

In Canada, the S&P/TSX Composite Index continued its recent uninspiring performance, remaining flat for another week, as pressure from the technology selloff wafted across the border and a 5.4% weekly decline in the price of crude oil weighed on performance in both information technology and energy sectors.

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Disclaimer

The foregoing is for general information purposes only and is the opinion of the writer. No guarantee of investment performance is made or implied. It is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting or tax advice.