Securities of tech giants dropped on Monday, thereby triggering a decline in US stock indices.
The S&P 500 sank 0.7% and dropped to 3799.61 points, which is in stark contrast to the massive jump on Friday, when the index closed at another record high.
The Nasdaq Composite also fell by 1.3% and reached 13036.43 points, while the Dow Jones Industrial Average lost 0.3% and decreased to 31008.69 points.
This decline indicates that investors are scared that the US Congress would tighten its oversight of the tech giants, especially amid the recent incident in the Capitol, when Trump's supporters stormed it in an attempt to postpone Joe Biden's official recognition as the new US president.
After the events in Washington, Facebook blocked Trump's account, and Apple, Amazon.com and Google stopped supporting Parler, the favorite social platform of Trump's supporters.
In any case, before this event happened, the US stock market has been growing steadily. The reason for it was the hopes that the US Congress will increase government spending to provide further support for economic recovery.
Last Friday, macro statistics showed that recovery in the US labor market slowed in December. Apparently, employers have cut jobs, while cafes, restaurants and bars in many states were forced to close due to the coronavirus pandemic. On top of that, doctors warned of an increase in the number of infections and hospitalizations in January due to festivities and travel during the recent holidays.
Aside from that, more risks emerged as soon as the new year started. One example is the statement from House Speaker Nancy Pelosi, which said that the House could take measures to impeach incumbent US President, Donald Trump, by the end of this week. As a result, in the first week of January 2021, market participants behaved more cautiously when trading.
It is clear that Democrats in the US House of Representatives are serious about passing a resolution regarding Trump's removal from the office. If refused, they said they will discuss the move again on Wednesday. But objectively, the chances of dismissing the incumbent president before January 20 are not so great.
Anyhow, this issue in the US political environment has returned investors to late 2020 sentiment. In addition, the worsening situation with COVID-19 continues to oppress market participants. Unfortunately, no matter how much investors hoped for a better outlook in 2021, the baseline scenario, as a whole, remained exactly the same.
To add to that, amid expectations of additional incentives, the yield on 10-year US bonds continued to grow. On Monday, this indicator was reported as 1.131%, against 1.105% last Friday. This continuous growth cycle is the longest observed since October 2020. In addition, expectations for the government to issue more bonds to finance additional stimulus are also increasing.
As for the stock indicators of the Asia-Pacific Region, the Shanghai Composite fell 1.1%, while the Hang Seng index gained 0.1%. The Japanese stock exchanges did not trade due to the holidays.
