What happened

A broad cross-section of technology stocks dipped on Tuesday, as Wall Street focused on macroeconomic headwinds and the resulting challenges for businesses.

iPhone maker Apple (AAPL -1.50%) was down as much as 2.3% on Tuesday morning, social media giant Meta Platforms (META -3.59%) slipped as much as 2%, and customer relationship management (CRM) specialist Salesforce (CRM -0.35%) was off by as much as 1.1%. As of market close on Tuesday, the trio had recovered somewhat, but shares were still trading lower, down 1.5%, 1.3%, and 0.3%, respectively. These stocks were dragged lower by the broader market, as the S&P 500 and Nasdaq Composite each declined by roughly 1.1%.

There was very little company-specific news behind the sell-off, but a key economic indicator pointed to spiraling costs for qualified workers.

So what

A jobs report early Tuesday confirmed recent trends that suggested hiring costs may continue higher for the foreseeable future. The Job Openings and Labor Turnover Summary for last month revealed that the number of job openings far outpaced the number of available job seekers, by a margin of nearly 2-to-1. The total number of available positions climbed to 11.24 million, up from 11.04 million in June -- and much higher than the 10.3 million predicted by economists. 

The Federal Reserve Bank watches this report closely. It views a strong report -- such as this one -- as an indicator of continuing inflation. The shortage of candidates for each position causes employers to offer higher compensation to entice job candidates, which results in wage inflation.

The Fed was hoping that the back-to-back rate increases of 0.75% that it announced in June and July would help cool the red-hot job market. The central bank is already dealing with consumer prices at 40-year highs, driven higher by supply chain constraints and rocketing fuel costs. A tight job market will only add to the momentous challenge of bringing inflation under control.

Just last week -- and contrary to the presiding opinion -- Fed Chair Jerome Powell left little doubt that the central bank would continue to pull out all the stops to tame runaway inflation. "While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses," Powell said. "These are the unfortunate costs of reducing inflation." 

Powell's comments increased the chances that the Fed would raise the key borrowing rate by another 0.75% when it meets again in September, making it the third such increase in just four months.

Now what

There was some company-specific news for two of our trio of technology stocks, though it's doubtful any of these revelations were sufficient to move the stock prices.

Antitrust regulators in the EU won't appeal a court ruling that found in favor of Qualcomm, according to a report by Reuters. The judges in that case invalidated a conclusion by the European Commission that suggested payments made to Apple were anti-competitive. The decision would have little impact on Apple or its business prospects. 

For its part, Meta Platforms announced that it would shutter the Facebook Gaming app later this year, pulling functionality for Apple's iOS and Alphabet's Android. The app will no longer be available from the Apple App Store or Google Play Store after Oct. 28. The ill-fated app was launched during the early days of the pandemic, designed to help gamers connect with their favorite streamers. Unfortunately, it ran afoul of Apple's terms of service and had trouble getting off the ground.

Given the tangential nature of these developments, they likely had a minimal effect on the prices of their respective stocks today. Rather, it was more likely the prospect of increasing wage inflation -- particularly in the big tech space -- that drove these stocks lower.

In the face of the ongoing bear market, shares of Apple, Salesforce, and Meta Platforms are currently trading 13%, 49%, and 59% off their respective highs reached late last year. Furthermore, these industry leaders are selling at six, four, and three times next years' sales, respectively, near their lowest valuations in years. Since these companies dominate their respective industries and have a long track record of overcoming challenges -- particularly those of the macroeconomic variety -- now may be a great time to buy.