Blame it on tech stocks — again.
Thanks to fresh blows to companies from Nvidia Corp. to Facebook Inc., the biggest industry in the S&P 500 Index dropped as much as 2.1 percent by 2:50 p.m. in New York, more than triple the next-worst performing group. The Nasdaq 100 Index slipped 1.2 percent, poised for its ninth decline in 11 days.
While the loss pales in comparison to last week’s worst tumble since 2015, the renewed weakness underscores the vulnerability in an industry whose growth prospects have lured investors, spurring stock gains that have doubled the market in the past three years. That leadership has repeatedly been threatened in the past year as the government stepped up regulations and strategists warned over the risk of momentum unwinding.
“Growth was the thing to buy,” said Gary Bradshaw, a portfolio manager at Hodges Capital Management in Dallas. “Now the markets are starting to see some chips in the armor. The market is questioning the steadiness of the technology sector, although we still think it’s going to be just fine.”
Most pronounced was the selloff in the FANG block of tech shares and its megacap brethren. The NYSE FANG+ index plunged 4.7 percent for the biggest drop in two years.
Facebook, under growing criticism that the social media company has failed to protect user privacy, extended its worst quarterly decline since 2012 as Chief Executive Officer Mark Zuckerberg is expected to testify before the U.S. House Energy and Commerce Committee. The stock slipped as much as 4.2 percent toward the lowest closing level since July.
Nvidia, the graphics-chip maker that has been seeking to expand in the automotive market, tumbled 6.9 percent after temporarily suspending its self-driving vehicle testing.
In other tech moves:
Twitter tumbled 11 percent after Citron disclosed a short bet on the stock and said the company is the most vulnerable to “privacy regulation” among social media peers. Netflix, the second-best performing stock in the S&P 500 this year, fell as much as 4.4 percent in a rare pullback. The stock is still up 60 percent for the year. Apple Inc. held up the best among tech megacaps, although it still fell as much as 1.8 percent, after releasing a new iPad focused on schools and a new education service called Schoolwork at an event in Chicago.