Elon Musk, Jeff Bezos, and the 6 other richest Americans have suffered a nearly $400 billion wealth wipeout this year

• The eight richest Americans have seen close to $400 billion erased from their fortunes this year.
• Elon Musk's net worth has shrunk by $140 billion, while Jeff Bezos' wealth has slid by $86 billion.

The eight wealthiest Americans have seen nearly $400 billion wiped off their combined fortunes this year, as historic inflation, soaring interest rates, and mounting fears of recession continue to hammer the value of their stocks.

Tesla CEO Elon Musk's net worth has shrunk by an astounding $140 billion, slashing his wealth to $130 billion as of Tuesday's market close, according to the Bloomberg Billionaires Index.

The sharp decline reflects the roughly 70% drop in Tesla stock this year, driven by investors swapping technology stocks for safer assets, worrying that running Twitter is a costly distraction for Musk, and fearing a US economic downturn and overseas headwinds will hit the automaker's growth.

Meanwhile, Amazon founder Jeff Bezos' wealth has fallen by $86 billion, while Alphabet cofounders Larry Page and Sergey Brin have seen their fortunes shrink by a combined $91 billion. Microsoft cofounder Bill Gates' net worth has also tumbled by $29 billion, while former CEO Steve Ballmer has taken a $21 billion hit.

Similarly, Oracle cofounder and Tesla investor Larry Ellison has suffered a $17 billion blow to his fortune, while Warren Buffett's wealth has only dropped by $3 billion. The eight Americans, along with LVMH's Bernard Arnault, Adani Group's Gautam Adani, and Reliance Industries' Mukesh Ambani, hold the top 11 spots in Bloomberg's global wealth rankings.

The shrinking US fortunes overwhelmingly reflect sharp declines in tech stocks this year. Amazon's stock has halved in value, Alphabet shares have tanked 40%, Microsoft has dropped 29%, and Oracle 8%.

While Buffett's Berkshire Hathaway shares have inched upward in value this year, some of the investor's other stocks have retreated and he's also donated shares to charity. As a result, his fortune has shrunk by about $3 billion this year.

The upshot is that the eight richest Americans have seen an estimated $386 billion erased from their combined fortunes. That figure rivals JPMorgan's market capitalization, and comfortably exceeds the market value of Tesla ($345 billion), Nvidia ($352 billion), and all but a handful of America's biggest companies.

A big chunk of the billionaires' wealth was vaporized by the sell-off in technology stocks this year, which has sent the Nasdaq index down 35% since the start of January. The downturn has been fueled by the Federal Reserve hiking interest rates from virtually zero in March to over 4% today, in response to inflation that surged to 40-year highs this year.

Higher rates make borrowing more expensive, which typically cools demand and relieves upward pressure on prices. However, they also bolster returns from savings accounts and bonds, boosting their appeal relative to riskier assets such as stocks.

Notably, tech stocks are largely valued on their potential future cash flows. Those become less attractive to investors when prices are soaring, haven assets are offering bigger returns, and a recession is threatening to sap demand and slow earnings growth.

The fading appeal of tech stocks, coupled with company-specific headwinds such as flagging advertising demand and the impact of China's rolling COVID-19 lockdowns, help to explain why the richest Americans have seen part of their fortunes evaporate this year.

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