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Why Nutanix Stock Fell Nearly 5%

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What caused the jitters in the market?

In Monday’s trading session, the US stock market reacted sharply to the recent import restrictions on China. The S&P, the Dow, and the heavily tech-laden Nasdaq index, fell 1.4%, 1.3%, and 2.1%, respectively. Nutanix (NTNX) was unable to escape the ripple effect of these large indexes and fell ~5%, marking its fourth-largest fall in the last three months.

The additional import duty of 10% on $200 billion of Chinese goods, implemented by the Trump administration, has caused jitters across the market. The 25% limitation on Chinese investments in US technology companies also shook up the market.

Peer comparisons

In Monday’s trading session, the stocks of virtual and cloud platform operators VMWare (VMW), NetApp (NTAP), and International Business Machines (IBM) fell 3.3%, 0.03%, and 1.8%, respectively.

In the last year, Nutanix stock had a bull run, driven by the strong demand for its cloud products. The stock rose 179% and is currently trading at $51.86.

Other factors causing the decline

The US ten-year bond yield also increased significantly to 2.9%, buoyed by strong growth in the US economy. Higher bond rates will make stocks less attractive to investors, leading to more selling pressure for the equity markets.

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