Tech stocks saw larger losses relative to the broader selloff in US equities on Monday. The tech-heavy Nasdaq 100 shed 1.55 percent, compared to the 0.66 percent decline in the S&P 500 and the Dow Jones index’s 0.29 percent drop.
At the time of writing, Nasdaq 100 futures are attempting to stop the rot and prevent further losses.
Big Tech’s response to Capitol chaos draws ire from politicians and investors
In the wake of last week’s chaos on Capitol Hill, Facebook has suspended President Donald Trump’s account until at least Inauguration Day, while Twitter has “permanently suspended” his account. Google and Apple have removed from their stores the alternative social media platform known as Parler, which is favoured among Trump supporters. Amazon has also denied Parler access to its web servers.
Such moves have been publicly decried by senior lawmakers in France and Germany, including German Chancellor Angela Merkel.
And markets also made their voices heard, as evidenced in Monday’s performance for these tech stocks:
The backlash against social media and tech platforms then fed into a 2.4 percent drop in the FXTM Social Media index on Monday. The index (which comprises Facebook, Google, Twitter, and Snapchat shares in equal weights) has been trading sideways since the November elections, in contrast to the broader gains in US equities over the past two months.
Will Big Tech's stock prices post new record highs soon?
These recent contentions surrounding censorship and freedom of speech isn’t likely to have a long-lasting impact on Big Tech’s fundamentals, compared to the other woes facing the sector. Note that these tech behemoths had been facing lawsuits and tightened scrutiny from US and European lawmakers, and such political pressures are enjoying bipartisan support.
It remains to be seen how long this latest backlash will last, though such bouts are not new to these tech giants.
As investors continue digesting these risks, while also contending with the stretched valuations in these stocks, Big Tech is set to have a harder time posting new record highs compared to benchmark US stock indices in the months ahead.
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