Kevin Warsh's hawkish Fed stance triggers tech stock sell-off, more pain expected
By
Stephen Bartholomeusz
Summary
The article discusses how Kevin Warsh, Trump's Federal Reserve chair pick, triggered a sharp sell-off in Wall Street stocks — particularly in high-valuation tech and semiconductor companies — by signaling a shift in interest rate expectations. The Philadelphia Semiconductor Index dropped nearly 8%, the Nasdaq fell 3.5%, and the S&P 500 declined almost 2%. The piece warns that more market pain could follow if Warsh maintains his hawkish stance, especially for companies like SpaceX trading at extreme multiples (160x revenues).
Source
bskyKevin Warsh's hawkish Fed stance triggers tech stock sell-off, more pain expectedsmh.com.auKey quotes
· 3 pulledFor the big tech companies, trading on abnormally high multiples of their revenues and earnings – in SpaceX's case, when it was trading at 160 times last year's revenues – even a modest shift in interest rate expectation has a magnified impact on their valuations.
The worst hit sector of the market was semiconductor stocks, with the Philadelphia Semiconductor Index plunging almost 8 per cent this week.
The tech-heavy Nasdaq index is down 3.5 per cent since the Fed meeting and the broader S&P 500 just under 2 per cent.
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