Xero Ltd (XRO.AU) experienced a significant drop in its stock price during Monday's trading session, plummeting 7.31%. This sharp decline comes as part of a broader selloff in Australian technology stocks, which are tracking the negative sentiment in US stock futures.

The downward movement in Xero's stock price can be attributed to the spillover effects from the US market. Late on Sunday, US stock futures opened sharply lower, signaling a continuation of the two-day selloff that had already wiped trillions from equity values following President Trump's recent tariff announcement. This negative sentiment in the US markets has directly impacted Australian tech stocks, with investors reassessing their positions in light of increased global trade tensions.

The Australian tech sector as a whole has been hit hard, with the S&P/ASX All Technology Index (AXIJ) falling as much as 8.3% to its lowest level since February 15, 2024. This puts the sector on track for its biggest intraday percentage loss since February 24. Year-to-date, the AXIJ has now declined by 27.6%, significantly underperforming the broader ASX 200 index, which has seen a more modest loss of around 12%. As a key player in the Australian tech landscape, Xero's sharp decline reflects the heightened volatility and uncertainty currently facing the sector.