S&P 500 drops 3%, Dow loses 700 points as Amazon leads tech shares lower
The Dow Jones industrial average traded 706 points lower, with Intel as the worst-performing stock in the index. The S&P 500 pulled back 3.1 percent and entered correction territory, with tech falling 3.3 percent. The index also dropped below its 200-day moving average, a key technical level. The Nasdaq composite dropped nearly 3.4 percent — also entering correction — as Amazon declined 5.4 percent.
"The market leaders are under pressure," said Marc Chaikin, CEO of Chaikin Analytics. "It's a situation where the proven winners for the past few years are faltering." When that happens, "there is a negative psychological sense in the market."
The e-commerce giant's stock fell after President Donald Trump tweeted on Saturday that Amazon was scamming the U.S. Postal Service, adding the service loses "billions of dollars" delivering packages for the e-commerce giant.
Amazon has been one of the best-performing stocks over the past year, rising nearly 64 percent in that time period.
Trump tweeted again about Amazon on Monday, saying: "Only fools, or worse, are saying that our money losing Post Office makes money with Amazon. THEY LOSE A FORTUNE, and this will be changed."
Snap's stock also fell 7.8 percent Monday after MoffettNathanson reiterated its sell rating, noting it found students were "uniformly disapproving" of the company's app redesign.
Intel dropped nearly 10 percent after Bloomberg reported Apple would use its own chips for Mac computers, ditching Intel. The Dow hit its lows of the day on the back of the report.
Traders also fretted over the possibility that a trade war may be brewing.
China announced overnight Monday it had implemented tariffs on 128 types of U.S. imports. The goods hit with the charges the list of products proposed by Beijing in March and comes as a direct response to Trump signing off on tariffs on imported steel and aluminum last month. China said in March that those goods had an import value of $3 billion in 2017.
Trade worries also remained after Trump linked his proposal to build a border wall between the U.S. and Mexico to ongoing NAFTA negotiations between the two countries. In a tweet Sunday, Trump said: "They must stop the big drug and people flows, or I will stop their cash cow, NAFTA. NEED WALL!"
However, "despite fears of a global trade war, guidance among the early reporting companies are taking earnings growth expectations higher," said Raich, noting companies are getting a substantial boost from lower corporate taxes.