NEW YORK: The Nasdaq sank more than 1per cent on Wednesday, with social media companies leading technology stocks lower as Twitter and Facebook executives faced US Congress over what lawmakers see as a failure to combat foreign efforts to influence US politics.The broader market was also weighed by a drop in energy stocks as oil prices weakened and fears over the likelihood of the United States slapping new tariffs on Chinese goods as early as this week.Twitter dropped 5.4per cent and Facebook fell 1.8per cent as their top executives faced lawmakers.
Alphabet, whose offer to send its chief legal officer to Congress rather than its chief executive officer was declined, slid 2.6per cent.
Snapchat-parent Snap Inc was down 4.4per cent.The testimony is going to affect the tech sector and there are some concerns about how government and policies could pose as a threat to these growth stocks, said Ryan Nauman, market strategist at Informa Financial Intelligence in Zephyr Cove, Nevada.But it wont have a huge effect on the overall market today, will likely only hurt the sector.The technology sector tumbled 1.81per cent, the most among the 11 SP sectors.
But seven of the 11 sectors were higher, led by the consumer staples sectors 0.78per cent gain as food packaging companies rose.With concerns over trade simmering, Commerce Department data showed that the US trade deficit hit a five-month high in July, suggesting the Trump administrations protectionist policy was so far not having an impact.
The data comes as consultations on a US proposal to impose tariffs on $200 billion more in Chinese imports ends on Sept.
6, with Trump ready to impose these tariffs after that, according to Bloomberg.