The Dow Jones Industrial Average (DJI) has fallen nearly 450 points today amid a tech market sell-off following growing governmental concerns over Facebook’s (NASDAQ:FB) data handling. Almost all of the Dow’s constituents are in the red.
At the time of writing, three major technology stocks on the Dow are performing as follows; Apple (NASDAQ:AAPL) are down -1.70%, while Cisco Systems (NASDAQ:CSCO) are down -1.49% and Microsoft (NASDAQ:MSFT) are down -1.61%.
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Legislators are speaking out after a New York Times report suggested that a Facebook data breach allowed political marketing firm Cambridge Analytica to sway the U.S. election in Donald Trump’s favor. In short, the data leak occurred when Cambridge University professor Aleksandr Kogan conducted a personality survey on Facebook. Any users who took part had to agree to provide their personal information — as well as their friends’ personal information, in accordance with Facebook’s privacy rules — to Kogan. All in all, data on around 50 million Facebook users was gathered. However, the data was then passed on by Kogan in defiance of Facebook’s privacy rules to Cambridge Analytica, who used it in politically-charged marketing for the 2016 U.S. election. Now, U.S. legislators are demanding to know why this was allowed to happen, and government regulation of technology firms might be on the horizon. Understandably, this is what scared investors into today’s sell-off; although Facebook isn’t actually a Dow component, it is still big enough to trigger more sell-offs in the tech world.
Facebook itself is down -6.77% at the time of writing, suffering its sharpest drop since February. Other companies dragging down the Dow include construction machinery manufacturer Caterpillar (NYSE:CAT) which, being down by -2.75%, leads the pack in terms of percentage drop. Family consumer product company Johnson & Johnson (JNJ) follow behind at -2.57% while manufacturing conglomerate 3M (MMM) comes third at -2.39%.
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In addition to tech concerns, the Dow is likely suffering from fears over Donald Trump’s ‘trade war’, which comes after he implemented tariffs on both Chinese imports as well as global steel and aluminum imports this month. Reports state that the president implemented such tariffs in order to make the US more self-sufficient, though many countries see it as an affront to global trade and are considering retaliation.
The Dow has had a rocky 2018 so far since plummeting from a January high of 26,616.71 points – its highest ever. It has failed to maintain this upward trend, performing inconsistently through February and March, and currently sitting at a comparatively low 24,610.91 points.
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