Major technology stocks such as Apple and Alphabet extended losses Monday after Federal Reserve Chairman Jerome Powell said the central bank would stick with its plan to raise interest rates to fight inflation.
Growth stocks are particularly vulnerable to higher interest rates. Growth companies, such as the U.S. tech giants, generate most of their cash flow far in the future. Higher interest rates mean future cash isn’t as valuable as it was when rates were lower.
The tech-heavy Nasdaq Composite was down 0.9% on Monday. The index declined 3.9% on Friday, its worst day since June.
Apple was down 2% on Monday after tumbling 3.8% on Friday after Powell, in a short speech Friday at the Jackson Hole economic conference, said the Fed would remain aggressive in raising interest rates until it returns inflation to the central bank’s target of 2%.
Also pressuring Apple stock was a report from Politico that said Justice Department lawyers were in the early stages of drafting a potential antitrust complaint against the iPhone maker. A person with direct knowledge of the matter told Politico that the department’s antitrust division hopes to file a lawsuit by the end of the year.
Shares of Alphabet , the parent company of Google, were down 1% Monday after dropping 5.4% on Friday following Powell’s hawkish message.
Meta Platforms (META), the Facebook parent, fell 1.13% Monday. The stock declined almost 4.2% on Friday.
The Wall Street Journal reported that Meta has agreed to settle a lawsuit that accused the social-media giant of allowing third parties, including Cambridge Analytica, to access private user data. During the Cambridge Analytica scandal, a British consulting firm was alleged to have collected data on up to 87 million Facebook users without their consent. Cambridge Analytica worked with the 2016 campaign of former President Donald Trump.
Shares of other tech giants also were trading lower Monday. Microsoft was down 1.36% after slumping 3.9% on Friday. Amazon.com declined 1.14% after the stock finished Friday down 4.8%.