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.
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.