Stock markets are vulnerable to any incidents of investigations launched by financial watchdogs. As soon as anti-trust officials stated that several IT corporations had been subject to scrutiny, shares of US hi-tech companies went into a downward spiral. Shortly after the announcements, stocks of the telecommunications firms also reversed downwards.
The reason behind the downturn is the news on investigations into hi-tech giants like Amazon, Apple, Facebook, and Google announced by Congress and the US anti-monopoly authorities. In response, the Nasdaq Composite plummeted 1.6% in a single trading day, having posted the worst intraday dynamic among other benchmark stock indexes. The S&P 500 dipped 0.4% and the Dow Jones climbed 0.02%. At the same time, the shares of Alphabet Inc., Google’s parent company, dropped 6.1%, Amazon’s shares shed 4.6%, and Microsoft’s shares lost 3.1%. Facebook suffered the steepest slump of 7.5%. Apple’s shares saw a 1% decline. No wonder, any government probe instantly spoils investors’ sentiment. The anti-trust accusations against several leading companies dealt a blow to the composite index.
On June 1, The Washington Post reported that the US Justice Department and the Federal Trade Commission agreed to set out obligations within the framework of the probe into Amazon’s “anti-competitive conduct”. On the same date, The Wall Street Journal informed market participants that the Department of Justice notified Google of a similar investigation. On June 3, the Federal Trade Commission also made a commitment to tighten scrutiny over Facebook. Besides, Reuters reported that Apple is also facing an anti-monopoly investigation.
