(Adds chart, detail on upcoming reports, stock valuations, investor comment) By Amanda Cooper and Naomi Rovnick LONDON, July 25 (Reuters) - Investors are ditching some of this year's favourite trades as a retreat in the glitzy megacaps risks snowballing into a multi-pronged selloff that has hit everything from cryptocurrency to gold, and made calling the market's next move ever more complex. Shares on Wall Street on Wednesday suffered their worst daily selloff since late 2022, with the tech-heavy Nasdaq Composite dropping 3.6% and the S&P 500 down 2.
3%. Both gauges recovered from some of those losses on Thursday. The 2024 "everything rally" - stocks, and especially tech, up; gold and crypto - up; dollar - up; emerging markets, up - may be on hold.
A diverse set of factors has lit the fuse of market anxiety over how stretched valuations in Big Tech might be, against a backdrop of rising U.S.-China trade tensions and tepid earnings.
Quarterly results from Tesla and Alphabet , the first of Wall Street's most valuable companies to report, have unnerved investors ahead of a deluge of results next week. Microsoft reports on Tuesday, followed by Meta Platforms on Wednesday, and then Amazon and Apple on Thursday. Those four companies have a combined stock market value of over $9 trillion and account for a fifth of the entire S&P 500.
“Investor positioning was pretty pro-risk and people had become quite positively inclined towards markets and valuations had become quite stretched,�.