At closing bell, the Dow had slid into the red by 632.42 points, the S&P 500 had fallen by 95.12 points, and the tech-heavy Nasdaq Composite had plunged by 465.44 points. Earlier trading saw the Dow plummet from green territory by 600 points, whereas the Nasdaq fell over 3%.
The closing figures prove to be the latest in the New York Stock Exchange’s worst stock sell-offs in over five months amid the novel coronavirus pandemic, which initially sent American and foreign stocks plunging after COVID-19-containment measures imposed by various countries shuttered the global economy.
However, the current downfall into red territory has largely been driven by declining tech stocks that previously benefited from the massive spike in Americans resorting to remotely working, learning and shopping in an effort to curb the spread of the coronavirus.
“I think we should start to anticipate a rotation, the momentum behind tech is going to ease,” Seema Shah, a chief strategist at Principal Global Investors, told the Wall Street Journal.
Tuesday trading saw shares of Facebook, Amazon, Microsoft and Google-parent Alphabet down by more than 3%, as Apple’s stock price plunged by over 5%. Additionally, Zoom Video Communications, the popular video chat software tapped by several companies and institutions to stream courses and business meetings during the pandemic, saw its share price fall by 4.43%
“As we’re seeing easing lockdowns and the prospect of a vaccine, people are beginning to go back to a more normal way of life and reliance on tech is starting to fade from the peak where it was at the height of the lockdown,” Shah noted.
Elsewhere, shares belonging to electric car company Tesla sank by 21.06% on Tuesday, marking its worst one-day drop ever. The company's stock tumble comes after the vehicle maker failed to be added to the S&P 500 index.
Although investor concerns were mostly influenced by the tech industry, political issues, particularly in regards to US-China relations, have also weighed on trading matters. In response to US President Donald Trump announcing Monday that he was considering “decoupling” economically from China, Beijing officials on Tuesday launched a global initiative regarding data security after accusing the US of “bullying.”