Facebook helps weigh down Wall Street

Stocks tumbled on Monday, dragged down by shares of technology companies, which until recently had propelled the nineyear bull market ever higher.

Facebook was at the heart of the sell-off. Its shares plunged more than 7 percent after news emerged over the weekend that a political data firm with links to President Donald Trump’s 2016 campaign had harvested private information from more than 50 million Facebook profiles.

The news reports could open the door to greater government scrutiny and potential regulatory action toward the technology sector. Already, government officials in the United States, Europe and elsewhere have been demanding tougher oversight of the world’s largest tech companies. That, in turn, could erode the industry’s profits and potentially force some companies to adjust their business models.

Daniel Ives, chief strategy officer and head of technology research for GBH Insights, said Facebook will have to work hard to reassure users, investors and governments.

“This is a defining moment for them,” he told the Associated Press. “It either becomes a blip on the radar and it helps the platform mature... or it becomes the start of something broader.”

Facebook’s decline on Monday was the stock’s worst single-day fall since late 2012, and it weighed on the other tech giants. Google’s parent company, Alphabet, fell more than 3.5 percent. Amazon and Microsoft dropped more than 2 percent. And Apple, the largest American company by market capitalization, sank 1.8 percent.

The falling tech stocks pulled down the overall market, with the Standard & Poor’s 500 index down more than 1.5 percent. The tech-heavy Nasdaq composite index fell more than 2 percent.

The turbulence in the tech industry adds to the recent market turmoil. After more than a year of extraordinary calm in the stock markets, equities have been on a roller coaster since February. The volatility has been driven in large part by fears that inflation might bubble up and prompt the central banks to hike interest rates faster than expected.

Since the start of the current bull market in 2009, technology companies have delivered total returns — including the appreciation in their share prices and the dividends they have paid — of more than 570 percent, far outpacing the broader market. In 2009, the tech sector made up 17.5 percent of the S&P 500. Today, that figure is more than 25 percent, meaning that a swing in tech has a big effect on the broader market.

A few giant companies, such as Facebook, Amazon, Netflix and Google’s parent company, have been the driving force behind the rally.