Why are ASX 200 shares tumbling like dominos on Wednesday?

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.

The post Why are ASX 200 shares tumbling like dominos on Wednesday? appeared first on The Motley Fool Australia.

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More reading

• Why this fund manager is not banking on CBA shares right now
• 3 ASX 200 mining shares that smashed all-time highs on Tuesday
• Here are the top 10 ASX 200 shares today
• Why did the Core Lithium share price leap another 6% on Tuesday?
• Fortescue’s Twiggy piles $120m into junior miner slated for ASX listing

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.

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