Tech ETFs and Nasdaq Falter on Sell-Off
This article was originally published on ETFTrends.com.
Wednesday's trading session saw a post-Labor Day Weekend sale in the technology sector, causing the Nasdaq to lose 1.19% and tech ETFs to plummet. Leading the pack of market decliners in the Nasdaq was JD.com Inc--down 10.6%, Workday Inc--down 9.2% and Netflix Inc--down 6.2%.
The three largest tech ETFs in terms of total assets declined--the Vanguard Information Technology ETF Technology Equities (VGT) fell 1.29%, the Technology Select Sector SPDR Fund Technology Equities (XLK) was down 1.58% and the First Trust Dow Jones Internet ETF (FDN) lost 2.72% at the close of the market.
Shares of Facebook and Twitter also slumped as their chief executives, Jack Dorsey and Sheryl Sandberg, faced Congress to answer a battery of questions on preventing foreign influence operations in elections and abuse on social media platforms.
"When you have these corporate executives dragged to Congress, that makes the market more nervous," said Robert Pavlik, chief investment strategist at SlateStone Wealth. "That's why you're seeing the market take more of a wait-and-see approach on these stocks."
The Nasdaq experienced its worst drop since Aug. 15 as the Justice Department said Attorney General Jeff Sessions will meet with state attorneys general later in the month to discuss whether tech companies "may be hurting competition and intentionally stifling the free exchange of ideas on their platforms."
Related: Social Media ETF Stumbles as Facebook, Twitter Execs Face Congress
US, Canada Meet to Discuss NAFTA
Officials representing the US and Canada met to secure a deal to revamp the current North American Free Trade Agreement, which they were unable to secure during last Friday's deadline. Following a NAFTA deal with Mexico, the US was hoping to reach an agreement with Canada quickly, but talks stalled when both sides could not come to a resolution.
The trade deal struck with Mexico would effectively eliminate the NAFTA name and would now be called The United States-Mexico Trade agreement. The Trump administration was pushing for a revamp of the NAFTA agreement prior to December 1 when Mexico turns over its leadership to the incoming administration of President-elect Andrés Manuel López Obrador.
The bilateral U.S.-Mexico deal announced on Monday gives U.S. President Donald Trump the right to impose 25% tariffs on imports of Mexican-made passenger vehicles. If Trump proceeds with the tariffs, Mexican duty-free exports of cars and sport-utility vehicles to the U.S. would have a cap of 2.4 million vehicles per year.
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