E-commerce stocks tumble in sympathy with global market rout, recession outlook gains traction

A global sell-off has spilled into the e-commerce sector as shares are broadly lower in sympathy with significant losses in the Nasdaq, driving the online retail ETF (IBUY) down 3%. The feeding frenzy across global bourses was triggered by soft U.S. economic data and geopolitical developments that have sent global investors pivoting to safe havens and bracing for a cascade of circuit breakers.

The market rout was ignited last week as concerns about tech valuations reverberated across global markets. Risk aversion was amplified by a rate hike from the Bank of Japan that eviscerated yen carry trades, along with increased geopolitical tensions in the Middle East and UK, and concerns that the Federal Reserve waited too long to lower rates. U.S. selling on Friday spilled into overseas markets with Japan’s Nikkei suffering its worse one-day loss in 13 years. The Nasdaq subsequently opened as much as 6% lower on Monday to its lowest level in 3 months.

As a result, e-commerce shares limped into Monday’s open amid concerns that consumers will further tighten their wallets in the event of a global recession with shares of Amazon (NASDAQ:AMZN), Alibaba (BABA), Wayfair (W), Etsy (ETSY), eBay (EBAY), Shopify (SHOP), Baidu (BIDU), Chewy (CHWY) all in the red in early trading.