Facebook stock sales and shares of other big tech companies plummeted, pushing major indices into sharp declines to start the week
US Equity Futures Looking for direction ahead of Tuesday’s session on Wall Street.
Sell-offs in Facebook stock and other large technology companies rocked the market, prompting major US indices to fall sharply at the start of the week. The shares opened with a slight decline before the losses accelerated.
The S&P 500 fell 1.3% to 4,300.46. The Dow Jones Industrial Average fell 0.9% to 34,002.92 and the tech-heavy Nasdaq fell 2.1% to 14,255.48.
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Shares of smaller companies also declined, the Russell 2000 Index rose 1.1% to 2,217.47.
Facebook slipped 4.9% a day after a former employee told “60 Minutes” the company has consistently chosen its interests over the public good. The social network and its Instagram and WhatsApp platforms also faced a worldwide shutdown, which began around US time on Monday.
Apple fell 2.5% and Microsoft fell 2.1%.
Rising bond yields and energy prices are raising investor concerns about inflation.
US oil prices rose to around $78 a barrel, its highest level since 2014, as OPEC and allied oil producers stick to plans to increase production despite cautious global demand for crude.
The yield on the 10-year Treasury note remained stable at 1.48%.
Natural gas prices jumped 2.6%. Energy companies rose with energy prices. Devon Energy rose 5.3% for the biggest gainer in the S&P 500. Marathon Oil climbed 4.1%.
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Investors worry about inflation as oil prices rise and companies grapple with supply problems that drive up their costs and force them to raise prices. Wall Street is also concerned about a final move by the Federal Reserve to reduce timely bond purchases and raise its benchmark interest rate.
Wall Street will get more information on the health of the economy this week. On Tuesday, the Institute for Supply Management will release its service sector index for September. The service sector is the largest segment of the economy and its health is an important factor for development.
The Labor Department will release its employment report for September on Friday. The job market is struggling to fully recover from the damage caused by COVID-19 more than a year ago.
Meanwhile, shares in Asia fell after the broader tech company’s fall on Wall Street.
Tokyo’s Nikkei fell 3%, while oil prices rose.
Sino-US tensions hit the headlines again after US Trade Representative Catherine Tai plans to openly hold talks with officials in Beijing about an interim trade deal aimed at resolving the tariff war.
Tai said she “doesn’t want to stir up trade tensions with China.” But his comments suggested a continuation of US policy towards Beijing under President Joe Biden from the strategy adopted by his predecessor Donald Trump.
Speaking to the Center for Strategic and International Studies in Washington, D.C., he also said that the US must “protect its economic interests” and “do all to protect itself against the waves of damage that have been unfairly done over the years.” Necessary steps should be taken to “competition.”
Shanghai is closed until Friday for a national holiday. But shares in Hong Kong fell 0.3% to 23,989.61, while Tokyo closed down 2.8% in the morning to 27,658.31. South Korea’s Kospi fell 2.1% to 2,956.04 and Australia’s S&P/ASX 200 fell 0.8% to 7,218.90.
Benchmark US crude rose 35 cents to $77.97 a barrel in Tuesday’s trade in Asia. Brent crude, the standard for international pricing, rose 47 cents to $81.73 a barrel.
The US dollar rose from 110.93 yen to 111.11 Japanese yen. The euro fell from $1.1618 to $1.1608.
AP Business Writers Damien J Trois and Alex Veega contributed.