CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure. CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure.

Tech stocks no longer dominant in US stock market

FAANG stocks are not carrying the US stock market in 2019.

Apple and Amazon are no longer driving Wall Street. Tech stocks have declined over the last few months and it could have a lasting effect on the US stock market.

Why are tech stocks declining?

FAANG(Facebook,Apple, Amazon,Netflix and Google) stocks were once the most vital stocks on Wall Street for the past 10 years. However, with the latest global slowdown, many of those corporations are having trouble maintaining its growth and had a major selloff in 2018.

‘This is the first quarter in my memory that technology has on the whole had worse metrics than the S&P 500,’ said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute.

Apple's revenue and Amazon's earnings exceeded expectations in their latest results. However, both companies still projected weak guidance for future revenue because of declining sales overseas, especially in China.

Netflix's revenue report also caused shares to fall after its latest earnings were worse-than-expected after going into debt to provide content to consumers. Though Facebook's latest revenue report had better-than-expected earnings, the company’s reputation has been tarnished with many investors because of its data privacy issues.

What’s next for FAANG?

Though the FAANG stocks have declined, their earnings still generated billions of dollars in revenue and can rise if the US-China trade issues are resolved. Daniel Ives, Wedbush Securities analyst, is optimistic that the tech shares could rise and lift up the US stock market.

‘There was real concern that tech was the canary in the coal mine of what would be a very dark 2019. Thus far a lot of those fears are proving overblown’, said Ives.

This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

See an opportunity to trade?

Go long or short on more than 17,000 markets with IG.

Trade CFDs on our award-winning platform, with low spreads on indices, shares, commodities and more.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Friday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.