SAN JOSE (CBS SF/CNN) — Stocks dropped more than 400 points at the opening Thursday with several Silicon Valley tech giants among those hit hardest.
The FAANG stocks — Facebook, Apple, Amazon, Netflix and Google — stumbled at the start losing from 1-to-nearly-3 percent of their value.READ MORE: Early Season Red Flag Warning Sends Residents Scrambling To Protect Homes
Meanwhile, San Francisco ride-sharing service Lyft took another major step toward joining the turbulent market. The company it had confidentially submitted a draft registration statement for an initial public offering of shares with the Securities and Exchange Commission.
The number of shares to be offered and the price range for the proposed offering have not yet been determined. The company was valued at just over $15 billion earlier this year.
Thursday’s slide was also credited to another tech company in trouble.
The Dow was impacted by the arrest of Huawei CFO Meng Wanzhou in Canada that renewed doubts about the US-China truce. The latest sign of tension between Washington and Beijing also sent shudders through global markets. Hong Kong’s Hang Seng plunged 2.5% overnight, while European stock markets declined sharply as well.
Meng’s arrest serves as a fresh reminder that the United States and China remain in a trade war, despite the ceasefire reached last weekend in Argentina. Tariffs already imposed remain in place and new ones loom if talks fail to reach a breakthrough within 90 days.READ MORE: One Dead, Two Wounded In San Jose Shooting
“This comes at a truly delicate time,” Win Thin, global head of currency strategy at Brown Brothers Harriman, wrote to clients on Thursday. “We think this will force China to take a more aggressive and confrontational approach with the US.”
Renewed trade jitters, along with worries about an economic slowdown, sent the Dow plummeting 799 points on Tuesday. That selloff wiped out a chunk of last week’s rally, which was the S&P 500’s biggest weekly gain in seven years. US markets were closed on Wednesday in honor of President George H.W. Bush.
President Donald Trump spooked investors on Tuesday when he called himself a “Tariff Man” in a tweet. Trump also suggested tariffs will “MAKE AMERICA RICH AGAIN” — even though these levies are paid by American companies and consumers.
“The market will need to see tangible progress — both in policy and negotiations — before fully embracing the trade truce narrative,” Isaac Boltansky, director of policy research at Compass Point Research & Trading, wrote in a note to clients. “We struggle to see how a comprehensive agreement can emerge in the next 3 months and instead expect trade tensions to resurface in earnest early next year.
Investors are also nervously watching the plunging price of oil. US oil tumbled more than 2% as OPEC and its allies debate at a major meeting in Vienna whether to enact a supply cut aimed at balancing the market.MORE NEWS: COVID: San Francisco Businesses Thriving Again Under New Yellow Tier Freedoms
Saudi Arabia, the leader of OPEC, hinted that the reduction could be less than what analysts anticipated. Khalid Al Falih, the kingdom’s energy minister, told reporters that a cut of 1.3 million barrels per day is “excessive.”