Nasdaq braces for nervy fortnight as investors fall out of love with tech

The tech sector now faces a crunch fortnight as its biggest names report results, including Microsoft on Tuesday, Tesla on Wednesday and Apple on Thursday. They must prove they can thrive in a post-lockdown world where the cost-of-living squeeze is leaving people with less money for tech products and services.

Although a hesitant return to normal life has now been jolted by Omicron, smaller growth stocks such as the pandemic winners Peloton and Zoom have been under pressure for months. A near-record number of tech stocks have recently plunged at least 50% from their all-time highs.

Anxiety over US interest rate rises hurts the unprofitable tech firms promising big earnings in the future. The Federal Reserve, which meets this week, is likely to raise rates several times this year to tame US inflation, now at its highest since 1982.

The year 1982 was also when Time magazine presciently chose the personal computer as its person (or machine) of the year. Then, the notion of a company being worth 3 trillion dollars would have been staggering. Apple soared to the $3tn mark in early January (but has fallen 7% since) and must overcome the problems in global supply chains to continue justifying such a hefty valuation.

And even if the tech giants hit their numbers, they still face scrutiny. Meta, owner of Facebook, which reports on 2 February, is being targeted by regulators who want to break it up, and the chair of the Federal Trade Commission, Lina Khan, is vowing not to back down.