Dow dives 800 points as US stock market records worst day since June

Tech giants like Apple, Facebook, Microsoft, Alphabet, Amazon and Netflix, all appeared to be hit the hardest during the selling frenzy

The Dow Jones, S&P 500, and Nasdaq all dived on Thursday after months of gains (EPA)

The US stock market took a dive on Thursday, with the tech industry getting hit the hardest, making it the worst day for the market since June.

The Dow Jones industrial average plunged 807.77 points, or 2.8 per cent, just one day after President Donald Trump boasted about it surpassing 29,000 – which hadn't happened since February. It now stands at 28,292.73.

The S&P 500 closed 125.78 points lower, about 3.5 per cent down, at 3,455.06. The Nasdaq Composite, which has recorded gains for tech investors for months, dropped 598.34 points, or 5 per cent, to end at 11,468.10.

These declines from the three indexes marked the largest single-day drop since June.

Tech giants like Apple, Facebook, Microsoft, Alphabet, Amazon and Netflix, all appeared to be hit the hardest during the selling frenzy by investors on Thursday.

Apple's stock dropped more than 6 per cent, while the other tech giants lost between 3 per cent and 6 per cent.

"In the absence of a specific catalyst, it's easy to classify today's swoon as profit-taking," Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, told MarketWatch.

The dip in the stock market came after a remarkable run for the last couple of months following a February into March decline due to the coronavirus pandemic.

Initially, it was expected the stock market could post another day of gains after weekly jobless claims fell lower than expected. Unemployment claims dropped to an unadjusted 881,000 last week, according to the Labour Department. Economists were expecting it to fall around 950,000.

But the Institute for Supply Management's gauge of the US services industry also showed recovery slowed in the month of August. The index fell to 56.9 last month from 58.1.

Americans are also waiting to see if another round of coronavirus stimulus checks could be on the horizon from the federal government. But negotiations have stalled between Congress and the White House.

Experts remain unconcerned about the dip in the market on Thursday after multiple months of gains.

"My gut says this one will not be long or deep," Michael Farr, president of Farr, Miller & Washington, told the Washington Post. But he said the sell-off could indicate to lawmakers the need to pass the next stimulus package.