A presidential attack on Amazon, the aftermath of FAANG drama, and trade wars have The Dow plunging 700 points while investors worry what could be next.
3 Reasons Why The Dow Dropped 700 Points
The Dow dropped 700 points and the Nasdaq plunged about 3% on Monday. The Nasdaq has plunged 9.5% from its all-time high on March 12. All three major indexes are down for the year. The VIX volatility index jumped more than 15%.
The sell-off on the first day of the second quarter came after President Trump once again attacked Amazon on Twitter. Amazon (AMZN), one of the biggest drivers of the 2017 market rally, tumbled 5%.
Trump once again accused Amazon of taking advantage of the US Postal Service. However, Amazon pays the same lower rate that the post office charges other bulk shippers, and it collects sales tax in every state that charges it.
FAAANG Gang Takes a Hit
The famous FAANG quintet of Facebook Inc. (NASDAQ: FB), Amazon.com Inc. (NASDAQ: AMZN), Apple Inc. (NASDAQ: AAPL), Netflix, Inc. (NASDAQ: NFLX) and Google parent Alphabet Inc. (NASDAQ: GOOGL) is an acronym for five high-performing technology stocks in the U.S. equity markets are down.
With the continual attacks on Amazon by Trump, the Facebook Cambridge Analytica scandal, and reports that Tesla may not make production goals, it’s no surprise that other FAANG members have dropped.
According to CNN Money, “Amazon wasn’t the only tech stock in trouble. Tesla (TSLA), Netflix (NFLX) and Intel (INTC) all dropped by at least 4%. Almost every stock in the Nasdaq 100 lost ground.”
Wall Street Worried Over China’s Retaliation
Beijing responded to Trump’s bump on steel and aluminum tariffs on Monday by imposing tariffs on $3 billion of US imports. The tariffs apply to 128 products, ranging from pork and meat to steep pipes. Trump plans to place tariffs on about $50 billion more of Chinese goods.