Tech stocks see steep three-week slump, led by Amazon, Intel

With quarterly earnings from tech’s mega-cap companies largely in the rearview mirror, one thing is clear: Wall Street is nervous.

The Nasdaq Composite slumped 3.4% this week, bringing its three-week slide to 8.8%. That’s the worst performance for the tech-heavy index over that length of time since September 2022, when the market was in free fall due to soaring inflation and rising interest rates, according to FactSet.

Since the end of 2022, the narrative has been mostly positive for the tech sector, with the U.S. economy in recovery following the pandemic, and excitement building around the growth opportunities sparked by artificial intelligence.

The Nasdaq surged 43% last year, and remains up 12% year to date, after climbing to a record last month.

But the past earnings season has been disappointing, with some companies pointing to weaker-than-expected growth and others raising concern that the AI infrastructure buildout may hit some snags.

Hovering over the industry are concerns about the overall U.S. economy. The Labor Department said on Friday that job growth slowed much more than expected during July, while unemployment ticked higher, a day after economic data showed an unexpected jump in filings for unemployment benefits and a weakening of the manufacturing sector.

Josh Koren, founder of Musketeer Capital Partners, said tech giants with trillion-dollar-plus valuations are increasingly a macroeconomic play because they’re so big that softness in the overall data is naturally going to show up in their results.

Amazon and Apple both reported earnings on Thursday, with Amazon missing on revenue and issuing a disappointing forecast and Apple showing top-line growth of just 5%.

“As the economy slows down, a business like Amazon, like Apple, they’re going to slow down as well,” Koren told CNBC’s “Squawk Box Europe” on Friday. “That’s what you’re seeing in the earnings.”

Amazon plunged 8.8% on Friday, bringing its three-week decline to 14%. Executives on the earnings call attributed some of the revenue shortfall to consumers buying cheaper household goods and fewer bigger-ticket items like computers and TVs.

“We’re seeing a lot of the same consumer trends that we have been talking about for the last year, consumers being careful with their spend, trading down,” Amazon finance chief Brian Olsavsky said on the call. “We’re seeing signs of it continuing in Q3.”

Apple’s results were less concerning — the company beat estimates for earnings and revenue — and the stock ended slightly higher on Friday and for the week. But that came after a drop of more than 5% the prior two weeks.

Microsoft slid 4% this week and is down 10% over the past three weeks. The tech giant issued a weaker-than-expected forecast for the current quarter and missed on growth in its Azure cloud segment. Analysts at Mizuho wrote in a note after the report that Azure “core…