Jan. 11 (UPI) — U.S. markets fell on Monday as traders moved away from tech stocks over the anticipated fallout from social media companies taking action against President Donald Trump after his supporters stormed the Capitol building last week.
The Dow Jones Industrial Average fell 89.28 points, or 0.29%, and was down as much as 265 points earlier in the day. The S&P 500 dropped 0.69% and the tech-heavy Nasdaq Composite dropped 1.28%.
The response to Wednesday’s riot prompted investors to turn away from tech stocks that have mostly flourished in the pandemic due to concern that Congress might seek to increase regulation on social media companies as the insurrection was discussed and planned online.
Twitter stock dropped 6.41% and Facebook declined 4.01% after both social media companies indefinitely suspended Trump’s accounts citing concern that he could incite further violence.
Google’s parent company, Alphabet, Apple and Amazon also each fell about 2% after the former two removed the conservative-friendly social media service Parler from their app stores and Amazon removed it from its web hosting service late Sunday.
Markets largely ignored the immediate fallout of the siege on the Capitol as the three major indexes all ended the weeks at all-time highs with the Nasdaq increasing 2.4% S&P gaining 1.8%, the Dow rising 1.6%.
On Monday, however, traders sought to correct what was perceived as overzealous trading amid the pandemic.
Tesla stock for example fell 7.82% on Monday after rising 25% last week and 747% in the past 12 months.
“At extraordinarily high valuations is where we are and it’s being supported by massive amounts of stimulus,” DoubleLine Capital founder Jeffrey Gundlach told CNBC. “If you go back four decades of stock market data, there are many valuation metrics that are in the top 1-percentile of overvaluation. So, the thing that’s keeping it going, of course, is the Fed with rates at zero and promises to stay at zero.”