Global stock markets seem to be steadying after taking a hit this week with the US and Japan the two nations the most affected.
The New York Stock Exchange, Nasdaq and Tokyo Stock Exchange have all hit the headlines the most after a series of sharp declines in stock valuations.
Fears around a US economic slowdown after job data was released last Friday are the primary reason, leading to some investors selling off their stocks.
As of today, the Dow Jones, Nasdaq and S&P 500 in the US are all down by 2.60%, 3.43% and 3% respectively, whilst in Europe the FTSE 100 in London dropped 0.43% and the Cac 40 by 0.63% in Paris, as of the writing of this article.
On Nasdaq, technology and crypto sectors took a notable hit during Monday’s slump. The former is down 2.04% whilst the latter is down 5.89%, although interesting individual coins remain resilient with Bitcoin up 4.92% and Ethereum up 6.04%.
The technology industry in general has been facing challenges this year. Some companies were seeing declines in stock value even prior to Monday’s events, with American multinational computing giant Intel a notable case of this.
Various layoffs have been occurring across the tech sector for some time. Meta and Twitter/X were two notable examples of this, now apparently joined by Intel, Salesforce and Intuit, among others.
Technology leadership should pay close attention to these market developments, especially those in the early stages of their commercial activity – start-ups in particular.
Securing investment is vital to the future longevity of a business, and if prospective stakeholders are shunning the stock markets for fear of US economic decline, this is not great news for tech firms, including those in the fintech and paytech spheres.
It also does not bode well for governments and their ambitions. UK Chancellor of the Exchequer, Rachel Reeves, is currently engaging global business leaders and governments to seek investment in the UK economy.
Financial services, fintech and payments are core economic sectors in Britain, and would benefit greatly from any overseas investment the government may be able to attract. A loss of confidence in the markets will make Reeves’ job even more difficult, perhaps made even more challenging by the widespread public disorder seen on British streets over the past week.
It is not all doom and gloom, however. Japan was one of the markets most affected by Monday’s market slowdown, but is already bouncing back. Monday saw Japan’s biggest stock drop since 1987, but as of today the Nikkei 225 is up 10.23%. In the UK, although the FTSE100 is down slightly, the FTSE250 is up by a slight 0.10%, and in Amsterdam, the AEK has just recovered by 0.20%.
Hopefully for the tech sectors, this loss of confidence in the stock markets and subsequent drops in value will only be temporary, and the substantial investment fintech in particular has been enjoying, such as in the UK, will continue.
Stock crashes are rarely good for anyone, especially companies looking to get on their feet, and for the consumers who use their products – less money in people’s pockets means less spending and less payments volume, after all.
