The US stock market closed down collectively on Monday, with technology stocks falling deeper. The Nasdaq 100 index tumbled 1.55%, while the S&P 500 index and the Dow Jones index fell only 0.66% and 0.29%, respectively.
At the time of the author's writing, the Nasdaq 100 index futures are trying to stabilize and prevent the downward trend from expanding.
Tech giants jointly ban Trump account, arousing anger from politicians and investors
Following the violence in the US Congress last week, Facebook announced that it would ban Trump from posting at least until the President’s inauguration day, and Twitter announced that Trump’s personal account would be “permanently suspended”. Google and Apple have removed Parler, the social media platform favored by Trump supporters, from app products, and Amazon has also cut off Parler's website hosting services.
The actions of the tech giants aroused international doubts. French and German parliamentarians publicly condemned these moves, including German Chancellor Merkel.
The market also reacted negatively, as can be seen from the performance of technology stocks on Monday:
-
Twitter: -6.41%
-
Facebook: -4.01%
-
Apple: -2.32%
-
Google (Alphabet): -2.31%
-
Amazon: -2.15%
The FXTM social media index (composed of four stocks of Facebook, Google, Twitter and Serabu with equal weights) fell 2.4% on Monday. Since the US general election in November last year, the index has been in a sideways trade, failing to participate in the market’s upswing in the past two months.
Large technology stocks are expected to reach new highs
Technology giants’ joint "blocking" of Trump’s move has sparked debates about censorship and freedom of speech, but these may not have a long-term impact on the fundamentals of large technology companies. A more serious challenge comes from the US and European legislatures launched against technology giants For antitrust litigation and stricter antitrust supervision, the two parties in the US Congress have also reached a consensus on the issue of antitrust restrictions.
How long this recent wave of boycotts will last remains to be seen, but this is not new to these tech giants. Given that investors continue to digest these risks, and taking into account the high valuations of technology stocks, in the next few months, relative to the steadily rising US benchmark stock index, it may not be easy for large technology stocks to set new highs.