Stocks dropped sharply on Monday as some of the largest technology shares pressured the broader market.
The Dow Jones Industrial Average fell 458 points, led by a decline in Apple. The S&P 500 dropped 1.8 percent as the technology sector pulled back 3.5 percent. The tech-heavy Nasdaq Composite lagged, falling 2.8 percent as Amazon dropped 4.2 percent.
Apple led tech shares lower after The Wall Street Journal reported the company has cut production orders for the new iPhones unveiled earlier this year. The company’s stock fell more than 3.5 percent and fell back into a bear market, down 20 percent from its 52-week high.
Another WSJ report said Facebook CEO Mark Zuckerberg has adopted a more aggressive managerial style. The Journal said Zuckerberg told 50 of his top executives earlier in 2018 that the company is at war as it receives pressure from lawmakers, investors and users. This report comes after backlash from a New York Times article detailing how Facebook company ignored and then tried to hide that Russia used the platform to disrupt the U.S. election in 2016. Facebook shares fell 5.4 percent on Monday.
“It’s going to require a recovery in tech to make things happen,” said Greg Luken, CEO of Luken Investment Analytics. “I think where we are in tech, we’re going to see tough sledding towards the end of the year. I think stocks that are down will see further selling pressure.”
Tech shares also fell after The Financial Times reported Chinese authorities have alleged “massive evidence” of antitrust violations by Samsung, SK Hynix and Micron Technology. The report also said China would deepen its investigation into the three companies, which are the largest memory-chip manufacturers in the world.
Micron fell 4 percent while Advanced Micro Devices dropped 4.9 percent. Shares of Netflix and Alphabet also dropped 4.1 percent and 2.2 percent, respectively.
The technology sector was the best performer in the S&P 500 last year and is the second-best performer for 2018. However, tech is down more than 10 percent from its 52-week high, which was reached earlier this year.
“For the past year and a half, we’ve had a rolling correction that has been hitting sector after sector. I think investors are finally getting around to the leaders,” said Maris Ogg, president at Tower Bridge Advisors.
Ogg added she thinks this decline in tech is a buying opportunity. “Many of these companies have best growth rates of any industry. We think that’s going to continue.”
Stocks also declined on Monday after Vice President Mike Pencesaid in a speech Sunday that there would be no end to U.S. charges on $250 billion worth of Chinese goods unless Beijing changed its ways. His comments came at an APEC meeting in Papua New Guinea.
Pence’s comments also follow President Donald Trump saying last week he may not impose further tariffs on Chinese goods.
China and the U.S. have been in a trade spat for most of the year. The world’s largest economies have slapped tariffs on billions of dollars worth of each other’s goods. This has raised concern among global investors that the world economy could slow down amid tighter trading conditions.
Shawn Cruz, manager of trader strategy at TD Ameritrade, said the main catalyst for the market recently has been worry about U.S.-China trade. “That’s really the big driver and that’s what you’re seeing in tech. These companies have been at the forefront of those U.S.-China discussions.”
—CNBC’s Sam Meredith contributed to this report.