Stocks fell sharply on Monday, as data privacy concerns engulfed Facebook and drove a tech sell-off that weighed on the broader market.
The Dow Jones Industrial Average slipped 335.60 points, or 1.35%, to 24,610.91. The S&P 500 fell 39.09, or 1.42%, to 2,712.92 The Nasdaq Composite retreated 137.74 points, or 1.84%, to 7,344.24.
The tech-heavy Nasdaq was dragged lower by Facebook, which fell about 6.8%, its steepest one-day loss in years. Facebook is being criticized by lawmakers after disclosing that conservative-leaning Cambridge Analytica, a data company known for its work on Donald Trump's 2016 presidential campaign, was given access to customer data. Reports suggested that Cambridge Analytica may not have deleted the data. The company disclosed the problem late Friday.
Facebook said it has hired a digital forensics firm to investigate the matter, and Cambridge Analytica agreed to comply with the review. Cambridge Analytica issued a statement saying is has deleted all data it received from Facebook, adding that it did not use the information as part of its work with the Trump campaign.
Besides Facebook, the other so-called FAANG stocks – Apple, Amazon, Netflix and Alphabet – tumbled following a report that the European Union was set to impose a 3% revenue tax on the tech titans.
Volatility returned to the markets Monday. The CBOE Volatility Index, Wall Street’s “fear gauge,” jumped about 24% in recent trading, its biggest increase in more than a month.
Other potential market-driving developments this week include the Federal Reserve meeting and a potential government shutdown. In Washington, U.S. lawmakers must approve a spending bill by midnight Friday.
For the Fed, a rate hike is widely expected on Wednesday following a two-day meeting, and higher interest rates could pressure equities. The CME FedWatch Tool has the odds of a rate hike pegged at 94.4%.
In commodities, gold benefited from the equities sell-off and closed up 0.4%. West Texas Intermediate crude fell 28 cents, or 0.4%, to $62.06 per barrel.