Stocks fell sharply on Tuesday as technology shares were under pressure once again following their worst selloff in more than five months last week.
The Dow Jones Industrials hurtled lower 632.42 points, or 2.3%, to 27,500.89.
The S&P 500 faltered 95.12 points, or 2.8%, to 3,331.84.
The NASDAQ Composite fainted 465.44 points, or 4.1%, to 10,857.69. Tuesday’s drop put the tech-heavy NASDAQ down 10% over the past three sessions. In that time, the composite has fallen from a record into a correction on and intraday and closing basis.
Facebook and Amazon were both down more than 4% Microsoft tumbled 5.4%, and Apple slid 6.7%. Netflix closed 1.8% lower and Alphabet lost 3.6%. Zoom Video fell by 5.1%. The S&P 500 tech sector dropped 4.6% and closed Tuesday’s session more than 11% below an all-time high set on Sept. 2.
Shares of Softbank dropped 7% on Monday in Japan as it was identified as the big options buyer making a bet in the billions on tech stocks continuing to surge. The tech trade could lose some of its firepower if Softbank were to curb those bets.
Semiconductor stocks were under pressure amid simmering U.S.-China trade tensions. Nvidia gave back 5.6%, and Micron fell 3.2%, respectively. Applied Materials dropped 8.7%. Advanced Micro Devices pulled back by 4%.
Tesla plunged 21.1% — its biggest one-day drop on record — after the S&P Dow Jones Indices failed to add the surging and speculative stock to the S&P 500 after the bell Friday. Investors were betting on inclusion of the stock into the S&P 500, hoping for the stamp of approval on the rally by S&P. The snub shows the risks to the overheating NASDAQ trade.
Many on Wall Street believe the weakness derived from worries that the massive tech run-up pushed valuations to unsustainable levels. Even with last week’s pullback, the NASDAQ is up more than 70% from its March bottom.
Geopolitical developments also weighed on investor sentiment Tuesday. China accused the U.S. of “bullying” as it launched a global data security initiative on Tuesday.
That came as Washington continues to pressure China’s largest tech firms and convince countries around the world to block them. President Donald Trump also recently entertained the idea of “decoupling” from China, or refusing to do business with the country.
Prices for the 10-Year Treasury sank, raising yields to Friday’s 0.68%. Treasury prices and yields move in opposite directions.
Oil prices slumped $2.82 to $36.95 U.S. a barrel.
Gold prices gained $4.10 to $1,938.40 U.S. an ounce.