Stocks End Sharply Lower, Nasdaq Falls 4.1% and the Dow Drops 2.25%
Stocks ended sharply lower Tuesday as technology shares continued their rapid retreat and after President Donald Trump vowed to end the country’s reliance on trade with China.
The Dow Jones Industrial Average finished down 632 points, or 2.25%, to 27,500.
The S&P 500 was down 2.78% and the Nasdaq dropped 4.11%, its third straight down day.
Shares of Apple ended down 6.7%, while Microsoft fell 5.4%.
The tech-heavy Nasdaq fell 3.3% last week for its worst week since March, the Dow declined 1.8% and the S&P 500 lost 2.3%.
Analysts and investors have been trying to pinpoint the catalyst for last week’s slump in tech stocks, which lopped $180 billion in market value from Apple alone.
Reports have said Japanese conglomerate SoftBank has been taking huge options positions in technology shares and could have been a factor in tech’s recent rally.
“Traders and investors alike may slowly but surely come around to the idea that last week’s market rout was tech-sector-specific, rather than any real change in underlying sentiment,” said Stephen Innes, chief global markets strategist at AxiCorp.
Tesla fell 21% Tuesday after not being chosen for inclusion in the S&P 500. Instead, Etsy, equipment manufacturer Teradyne and pharmaceutical company Catalent will be joining the index, effective Sept. 21.
Despite the sharp declines, Tesla has about quintupled this year.
Trump raised the idea of decoupling the U.S. and Chinese economies. He threatened to punish American companies that create jobs overseas and to prevent those that do business in China from winning federal contracts.
“We’ll manufacture our critical manufacturing supplies in the United States, we’ll create ‘made in America’ tax credits and bring our jobs back to the United States and we’ll impose tariffs on companies that desert America to create jobs in China and other countries,” Trump said Monday at a White House news conference.
Oil prices declined Tuesday to their lowest levels since June as Labor Day signaled the end of the summer driving season. West Texas Intermediate crude oil, the U.S. benchmark, settled down 7.6% to $36.76 a barrel.