Tech drags down stocks, building on losses from May
Major U.S. stock indexes ended mostly lower Monday amid signs that the Trump administration is laying the groundwork to ratchet up scrutiny on some of the market’s biggest names: Apple, Facebook, Amazon and Google.
Google’s parent Alphabet lost 6.1% and Facebook sank 7.5%. Apple shed 1% on the day that the iPhone seller kicked off its annual software showcase. Amazon fell 4.6%. The four have a combined market value of nearly $3 trillion, and their losses helped tilt the S&P 500 lower on a day when there were actually more gainers than losers in the stock market.
Investors were reacting to media reports suggesting that government regulators are setting the stage for potential antitrust probes into each of the four technology giants.
The sell-off knocked the tech-heavy Nasdaq composite index into a correction, or a drop of 10% from its peak early last month.
The S&P 500 index fell 7.61 points, or 0.3%, to 2,744.45. The Dow Jones Industrial Average added 4.74 points, or less than 0.1%, to 24,819.78. The Nasdaq composite lost 120.13 points, or 1.6%, to 7,333.02.
Alphabet tumbled as media reports suggested it faces an antitrust investigation by the Justice Department. The speculation over the latest investigation comes on top of a tough weekend for the company when high levels of network congestion caused outages for some of its services, including YouTube and Google Cloud.
Reports suggested the Justice Department would take the lead on any probe into Apple, while any antitrust investigations into Amazon and Facebook would come from the Federal Trade Commission.
Tech losses outweighed gains in household goods makers, banks and other market sectors. Microsoft dropped 3.1% and Twitter slid 5.5%. Campbell Soup rose 2.9% and American International Group added 3.2%.
The market has been struck by a wave of volatility as investors wrestle with the uncertainty of the U.S. and its growing use of tariffs in international trade disputes. Investors spent the bulk of May fleeing to safer holdings as a global trade war flared up.
Bond prices climbed again Monday, pulling the yield on the 10-year Treasury note down to 2.07% from 2.14% late Friday.
News of deals, confirmed and denied, drove movement for several stocks. Cypress Semiconductor surged 23.8% on the announcement that German chipmaker Infineon is buying the company for more than $10 billion in cash. Cypress Semiconductors specializes in wireless and USB technology and Infineon said the deal will create a leading supplier of chips to the automotive sector.
Energy futures closed broadly lower Monday. Benchmark U.S. crude slid 0.5% to settle at $53.25 a barrel. Brent crude oil, the international standard, closed 1.1% lower at $61.28 per barrel.
Gold gained 1.3% to $1,327.90 per ounce, silver added 1.2% to $14.74 per ounce and copper fell 0.4% to $2.65 per pound.
The dollar fell to 108.02 Japanese yen from 108.41 yen on Friday. The euro strengthened to $1.1257 from $1.1171.
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