Kristina Wyatt

Sharp Dow Drop Affects Tech Companies Like Facebook, Twitter A 345-point (1.4%) Dow drop on Tuesday, March 27 devastated major tech companies including Twitter, Facebook, Nvidia, and Tesla, among many others. The sharp drop came just hours after a gain of 244 points earlier in the day, completely overturning the promising increase. One of the companies hit hardest was Netflix, which fell 6% and was its largest slump in more than two years. Nasdaq also has a sharp decline on Tuesday, dropping almost 3% which erased Monday’s gains in the tech area, ending the day Tuesday up just 1.5%. Several other companies suffered losses, including Wells Fargo, PNC, and Bank of America, each falling around 2% as a result of a sharp decrease in bond yields. March has seen lots of ups and downs on the Stock Market; on the 22nd, it dropped a whopping 724 points (2.9%), the 5th largest decline in the market’s history and the worst drop since early February of this year. Also dropping on the same day was the S&P 500 which dropped 2.5% and Nasdaq declined 2.4%. Stock market experts have long been fearing a global trade war recently, especially after President Trump announced a crackdown on Chinese imports, including a tariff on almost $50 million worth of imported Chinese products. The volatility index (VIX) escalated to 31%, which is still a bit better than the numbers in early February. Wall Street’s biggest fear is now trade war, according to a new survey by Bank of America Merrill Lynch fund managers. This new fear is a change from the inflation risk, which has been a source of concern since January 2017. A few of the companies hardest hit by the 3/22 decline was 3M, Caterpillar, and Boeing, which all fell around 5%, and all have significant ties to China. A chief strategist for Rhino Trading Partners admitted that Trump’s tariff plan against Chinese imports has everyone uncertain and in fear. Other experts warn that a major downturn in trade with China (one of the biggest world economies, after the U.S.) could spell disaster and mar what once was a positive economic outlook. Inflation worries, a long-running topic of concern among traders, have declined sharply in light of the President’s new trade agenda, but many experts say that a trade war is still uncertain, especially if relations between the U.S. and China recover. Facebook, one of the companies that took a loss on March 27th, has suffered declines in the past, including a 2.7% loss on Thursday the 22nd. Bank stocks (Citigroup, Bank of America, and Morgan Stanley) have also been losing points steadily, such as a decline of almost 4% on the 22nd as well as the drop on Tuesday 3/27. The market fell even further after the president’s top lawyer, John Dowd, resigned recently from legal team handling the Russia investigation. If Special Counsel Robert Mueller were to be terminated or replaced, experts say the market could also drop significantly. However, despite all the fears of trade wars, inflation, bond yield decreases, and controversial tariffs, market analysts are still optimistic for stocks, as new jobs have increased over 313,000 in February and company profits are still surging to record highs.