Why are ASX 200 shares tumbling like dominos on Wednesday?

The ASX 200 is a sea of red on Wednesday morning…

An ASX 200 share investor runs and leaps over rows and rows of blocks, as they topple in his wake.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

sdf

The S&P/ASX 200 Index (ASX: XJO) is a sea of red on Wednesday morning.

In early trade, the benchmark index is down a very disappointing 2.6% to 6,829.5 points.

Why is the ASX 200 index being sold off?

Investors have been selling off ASX 200 shares on Wednesday following a shocking night of trade on Wall Street which saw the Dow Jones fall 3.9%, the S&P 500 drop 4.3%, and the Nasdaq sink a massive 5.2%.

This was the worst night of trade on Wall Street since June 2020 and was driven by panic selling from investors after economic data revealed that US inflation failed to cool during August.

Investors had been optimistic that inflation had peaked and interest rates would not need to increase as aggressively as feared. However, that has been thrown out of the window now, with the market bracing for higher rates.

The worst performers on Wall Street were tech stocks, with Meta and Nvidia falling particularly heavily.

Unsurprisingly, this has led to our own tech sector coming under significant pressure today. The likes of Life360 Inc (ASX: 360), Block Inc (ASX: SQ2), and Zip Co Ltd (ASX: ZIP) have all fallen materially this morning. This has led to the S&P/ASX All Technology Index dropping a sizeable 3.9%.

But it isn't just the tech sector that is falling. ASX 200 shares in the resources sector, such as BHP Group Ltd (ASX: BHP), Fortescue Metals Group Limited (ASX: FMG), and Pilbara Minerals Ltd (ASX: PLS), are also deep in the red this morning.

Even the banks are taking a bath on Wednesday. This has seen the Commonwealth Bank of Australia (ASX: CBA) share price lose 3% of its value in early trade.

While these declines are hard to take, when the dust settles, there could be some very attractive buying opportunities for investors.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

Person handing out $100 notes, symbolising ex-dividend date.
Share Market News

$20,000 invested in CBA and these ASX 200 shares 5 years ago is worth

Did these shares deliver the goods for investors? Let's find out.

Read more »

a business person checks his mobile phone outside a Wall Street office with an American flag and other business people in the background.
Share Market News

Is the 'sell America' trade back?

Institutional investors appear to be at odds with retail investors.

Read more »

Unsure man analysing data on laptop.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a disappointing end to a disappointing week for investors this Friday.

Read more »

Six smiling office colleagues stand in a row and look at the camera.
Broker Notes

Brokers name 3 ASX shares to buy today

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why ANZ, Clarity, IGO, and Pilbara Minerals shares are dropping today

These shares are ending the week in the red. But why?

Read more »

Man drawing an upward line on a bar graph symbolising a rising share price.
Share Gainers

Why Betr, Centuria Capital, GR Engineering, and Mach7 shares are pushing higher

These shares are having a good finish to the week. But why?

Read more »

woman holding 'hiring' sign in shop
Broker Notes

How much upside does Macquarie tip for Seek shares?

The broker recently reviewed Australian job ad volumes for May.

Read more »

Ecstatic woman looking at her phone outside with her fist pumped.
Broker Notes

Macquarie tips 50% return for this cheap ASX All Ords stock

Let's see which stock the broker is feeling bullish about this week.

Read more »