A sharp sell-off in tech pushed the Nasdaq Composite and S&P 500 lower on Wednesday. Investors also braced for another round of trade negotiations between the U.S. and Canada.
The tech-heavy Nasdaq Composite dropped 1.2 percent — its worst day since Aug. 15 — to 7,995.17 as Facebook, Amazon, Netflix and Alphabet all dropped. Shares of Microsoft and Twitter also fell to drag the index lower. The S&P 500 declined 0.3 percent to 2,888.60 with tech pulling back 1.5 percent.
Tech shares fell as Twitter CEO Jack Dorsey and Facebook COO Sheryl Sandberg testified in front of Congress, addressing online election meddling and how to stop abuse on social platforms.
“When you have these corporate executives dragged to Congress, that makes the market more nervous,” said Robert Pavlik, chief investment strategist at SlateStone Wealth. Pavlik noted the hearing raised concern over tighter regulations in the tech industry. “That’s why you’re seeing the market take more of a wait-and-see approach on these stocks.”
The Justice Department said Attorney General Jeff Sessions will meet with state attorneys general later in September to discuss worries surrounding tech companies that “may be hurting competition and intentionally stifling the free exchange of ideas on their platforms.”
Netflix shares dropped 6.2 percent, while Amazon and Microsoft both fell more than 2 percent. Shares of Facebook and Twitter dropped 2.3 percent and 6.1 percent, respectively.
A sharp sell-off in tech pushed the Nasdaq Composite and S&P 500 lower on Wednesday. Investors also braced for another round of trade negotiations between the U.S. and Canada.
The tech-heavy Nasdaq Composite dropped 1.2 percent — its worst day since Aug. 15 — to 7,995.17 as Facebook, Amazon, Netflix and Alphabet all dropped. Shares of Microsoft and Twitter also fell to drag the index lower. The S&P 500 declined 0.3 percent to 2,888.60 with tech pulling back 1.5 percent.
Tech shares fell as Twitter CEO Jack Dorsey and Facebook COO Sheryl Sandberg testified in front of Congress, addressing online election meddling and how to stop abuse on social platforms.
“When you have these corporate executives dragged to Congress, that makes the market more nervous,” said Robert Pavlik, chief investment strategist at SlateStone Wealth. Pavlik noted the hearing raised concern over tighter regulations in the tech industry. “That’s why you’re seeing the market take more of a wait-and-see approach on these stocks.”
The Justice Department said Attorney General Jeff Sessions will meet with state attorneys general later in September to discuss worries surrounding tech companies that “may be hurting competition and intentionally stifling the free exchange of ideas on their platforms.”
Netflix shares dropped 6.2 percent, while Amazon and Microsoft both fell more than 2 percent. Shares of Facebook and Twitter dropped 2.3 percent and 6.1 percent, respectively.
“The threat of tech being the target of regulation is real,” said Ernie Cecilia, CIO at Bryn Mawr Trust. “But we have had a pretty good run up in tech. I think what you’re getting here is a rotation out of tech and into some of the other names that have lagged.”
The Dow Jones Industrial Average closed 22.51 points higher at 25,974.99, however, led by Caterpillar.
U.S. and Canadian officials met Wednesday to try and settle differences and secure a future deal on trade. The meeting takes place after the U.S. and Canada failed to secure a new agreement last Friday to replace the current North American Free Trade Agreement (NAFTA) pact.
Chrystia Freeland, Canada’s foreign minister, said Wednesday that officials worked hard over the weekend on NAFTA trade talks. Freeland added she looks forward to constructive conversations on trade between the two countries.
Canadian Prime Minister Justin Trudeau indicated on Tuesday, however, that the country would not bow to certain requests at the talks with the U.S. this week.
“President Donald Trump’s policies are boosting US economic growth despite his escalating trade war, which is depressing economies in the rest of the world,” said Ed Yardeni, president and chief investment strategist at Yardeni Research.
