The sell-off in tech stocks continued, as Apple, Amazon, Facebook and Microsoft all dropped more than 3 percent.
Shares of the giant tech companies tumbled on Monday, pushing major stock market indexes into negative territory for November and leaving investors clinging to a gain of less than 1 percent for the year.
Apple, Amazon, Facebook and Microsoft were all down by more than 3 percent shortly after midday, as investors digested a series of negative reports that suggested they face growing risks to their extraordinary pipeline of profits.
In an interview with Axios, Tim Cook, the chief executive of Apple, called new regulations for the tech sector “inevitable.” That prospect could significantly raise compliance costs for tech firms and potentially weigh on profits of the iPhone maker as well as other large, dominant tech companies like Amazon and Microsoft. Facebook has already seen its share price plummet after it reported that it significantly increased the amount it spends on security.
Separately, a report in The Wall Street Journal, citing people familiar with the matter, said Apple cut production orders for all three iPhones it launched in September in response to lower-than-expected demand.
Since Apple’s share price peaked at a bit more than $232 on Oct. 3, the stock has plummeted by nearly 20 percent, lopping more than $200 billion off the company’s market value.
Even so, Apple remains the most highly valued company in the United States, worth upward of $850 billion. That size gives it — and the other large tech companies — outsized influence over the direction of indexes that are weighted by the market value of companies, such as the S&P 500 stock index, which dropped more than 1.5 percent on Monday.
A rally for such large tech companies had been crucial to the stock market’s gains through the first three quarters of 2018. As recently as Sept. 20, the S&P 500 was up 9.6 percent for the year.
But those gains evaporated as the quarterly corporate earnings reporting season got underway, sending the S&P 500 down as much as 10 percent from the peak at various points. Initially, tech shares held up relatively well compared to the broader market. But in recent weeks, slipping tech shares have taken away a source of support for stocks.
