Shares of technology companies fell after more signs of an impending recession.
One brokerage said corporate tech budgets are already responding to economic conditions. “IT budgets are showing signs of incremental pressure as enterprises navigate an unsettled operating environment spurred by a range of factors including: inflation, rising interest rates, and geopolitical tensions,” said analysts at brokerage Morgan Stanley, in a note to clients.
Shares of economically sensitive semiconductor companies fell sharply, with the iShares Semiconductor exchange-traded fund, which tracks the performance of the ICE Semiconductor Index, falling by more than 3% to bring losses to more than 44% for the year to date.
“When you look at some of the areas of semiconductors … they’re not all created equal,” said Eric Marshall, president of money manager Hodges Capital. “The areas seeing most weakness are consumer, smart phones, personal computers and consumer electronics. When you look at things like chips for industrial, medical equipment, semiconductors for data centers … those areas are actually holding up pretty well.”
Facebook parent Meta Platforms fell sharply after analysts at brokerage Atlantic Equities cut their rating on the social media concern to neutral from overweight.
Write to Rob Curran at [email protected]
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