May 10, 2022: -On Thursday, Cloud companies, e-retailers, and household tech names got hammered, which wiped out hundreds of billions of dollars in market value and pushed the Nasdaq Composite to its lowest since June 2020.

After the Federal Reserve increased its benchmark interest rate by a half-point to stem increasing inflation, investors sold out of the part of the market that’s viewed as the growth driver on concerns that the economy is in for some dark times ahead.

Big Tech suffered a tremendous sell-off, with Amazon sinking nearly 8% and Facebook owner Meta Platforms off nearly 7%. Among other big names, such as Apple dropped by almost 6%, Google parent Alphabet sloped by about 5%, and Microsoft shares came down by 4%. Overall, the Nasdaq plunged 5%.

Investors were particularly down on e-commerce after Shopify, which ballooned during the pandemic by helping physical retailers go digital, reported disappointing first-quarter earnings and revenue. eBay and Etsy mourned double-digit declines following their earnings reports. The stock plunged 15%.

The rotation out of tech started in belatedly 2021 as soaring inflation. The threat of rising rates led investors to areas of the economy deemed safer, like energy and financial services. A further blow came with Russia’s invasion of Ukraine in February, which sent energy prices higher and heightened concerns about supply chain restrictions and weakening business conditions in numerous parts of the world.

The first quarter of the year was the worst period for the Nasdaq since the same three months in 2020 when the early days of the pandemic spurred an economic shutdown. The tech-heavy index fell 9.1% during the first quarter. Less than halfway through the second quarter, the Nasdaq is now down 21%.

Cloud stocks, which again became a favorite during Covid as corporations tapped services they could use remotely, were struck on Thursday. Bill-payment software developer Bill.com noticed shares plunge 13%, while project management software company Asana’s stock dropped 11%.

The WisdomTree Cloud Computing Fund was down nearly 8%, its steepest daily decline since September 2020.

For certain Covid winners such as Netflix, Zoom, Peloton, and Twilio, the reversal of fortune has been even better dramatic than the run-up. They are down more than 45% year to date, and their slumps deepened Thursday.