The Nasdaq Composite suffered through another brutal day, as the tech-heavy index shed more than 4% of its value. The S&P 500 and Dow Jones Industrial Average suffered losses of more than 2%. Microsoft, Nvidia, and Salesforce certainly played a part in the indexes' declines. The tech giants collectively lost more than $100 billion in market capitalization.
Reports that Japanese investment firm Softbank may have helped to drive the stock prices of many large tech stocks higher via massive option trades sparked concerns among investors. Many traders are worried that with the stock markets pulling back violently in recent days, Softbank may have to unwind its positions, which could accelerate the declines.
Like many high-quality growth stocks, Microsoft, Nvidia, and Salesforce have seen their shares surge since their lows back in March. Much of the gains were justified given the strength of their businesses and their attractive growth prospects. However, investors have begun to question if some of their gains were driven by a speculative trading frenzy. In turn, many have decided to take profits, and the selling could continue in the days ahead.