Nasdaq and the Standard & Poor’s 500, the two major Wall Street indexes, fell sharply on Wednesday. This was largely due to the tech sell-off, as markets and traders prepared for another round of trade negotiations between the United States and Canada.
The Nasdaq Composite Index fell by 0.9%, with the shares of Facebook, Amazon, Netflix and Google all dropping. Microsoft and Twitter also fell, leading to further declines in the Nasdaq.
The Standard & Poor’s 500 Index fell 0.2% as technology stocks saw a decline of more than 1%. Meanwhile, the Dow Jones Industrial Average rose 28 points, especially amid the gains recorded by Caterpillar.
Shares of US tech giants fell, with the testimony of Chief Executive Officer of Twitter and Chief Operating Officer to Facebook before the US Congress on the issues of interference in the electoral processes over the Internet and on the use of social media and networks. Senior analysts believe that the mere testifying before Congress of CEOs of companies such as Twitter and Facebook leads to further tension in the markets.
Netflix shares fell 3.9% and Amazon and Microsoft both fell more than 1%. Facebook shares also dropped by 1.3% and Twitter shares fell 4.5%.
US and Canadian officials will meet on Wednesday evening to try to settle trade disputes and secure a future trade deal. The meeting comes after the United States and Canada failed to secure a new agreement last Friday to replace the North American Free Trade Agreement (NAFTA).
Canadian Foreign Minister Chrystia Freeland said Wednesday that officials had worked hard over the weekend in trade talks with NAFTA and looked forward to constructive talks between the two countries. Canadian Prime Minister Justin Trudeau said on Tuesday that the country would not bow to certain demands in talks with the United States this week.
President Donald Trump’s policies boost US economic growth, although signs of a trade war that is undermining the economies of other nations are rising day after day. The risk lies in Trump’s policies, which may cause a large-scale crisis in emerging markets.
Emerging market shares fell broadly on Wednesday as investors worried about the poor state of Argentine and Turkish economies. The iShares MSCI Emerging Markets Emerging Markets (EEM) dropped more than 1%. Emerging markets have also been under pressure recently as the US Federal Reserve tightens monetary policy, which has partly boosted the dollar as Trump has taken a more defensive approach to trade.
Trump could impose customs duties on an additional $200 billion of Chinese goods. Rising trade tensions between the United States and China led to a decline in stock gains as investors assessed their potential impact on the global economy.
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