Wall Street had closed sharply lower Tuesday, with each of the major US indexes suffering their fourth decline in five sessions, fuelled by a sell-off in tech sector.

Tech stocks, among the best performing sectors of the bull market, have been under pressure recently as concerns about government regulation stemming from their strong growth and privacy questions surrounding Facebook.

“What it really amounts to is a complete lack of knowing what to expect,” said Peter Kenny, senior market strategist at Global Markets Advisory Group, in New York.

“It seems so open-ended, there is a lot of risk here and investors dont like uncertainty and this is the definition of uncertainty.”

Facebook shares dropped 4.9 per cent to $152.22 and is down nearly 15 per cent for the month. The Nasdaq Internet index saw its worst daily percentage drop since June 2016. Of the 11 major sectors of the S&P 500, only defensive plays such as consumer staples, telecom, real estate and utilities ended the session in positive territory.

The Dow Jones Industrial Average fell 344.89 points, or 1.43 per cent, to 23,857.71, the S&P 500 lost 45.93 points, or 1.73 per cent, to 2,612.62 and the Nasdaq Composite dropped 211.74 points, or 2.93 per cent, to 7,008.81.

Since hitting a record on January 26, equities have been battered by worries about rising inflation, the pace of interest rate hikes by the US Federal Reserve and the possibility of a global trade war. The S&P 500 is down 9.1 per cent from its high.

White House trade adviser Peter Navarro had confirmed on Monday top Trump administration officials have asked China to cut tariffs on imported cars, allow foreign majority ownership of financial services firms and buy more US-made semiconductors in negotiations to avoid imposing tariffs on a host of Chinese goods.

A person familiar with the discussions said these were among the asks from Treasury Secretary Steven Mnuchin and US Trade Representative Robert Lighthizer as they pursue talks with Beijing.

Markets roared back on Monday with their best day since August 2015 on hopes that the world’s two largest economies were willing to renegotiate tariffs and trade imbalances. But those gains proved temporary as early advances were overcome by the tech sector weakness.

The drop in Facebook continues to put pressure on the tech sector, which is down 5.2 per cent for March and on track for its worst month since April 2016.

Privacy concerns

Privacy concerns for the social media giant were highlighted further on Tuesday when a whistleblower said Canadian company AggregateIQ had developed software to target Republican voters in the 2016 US election.

Alphabet shares fell 4.5 per cent after an appeals courts resurrected a multibillion dollar copyright case brought by Oracle Corp against the company. Nvidia was another weak spot, falling 7.8 per cent after the chipmaker temporarily suspended self-driving tests across the globe.

Tesla shares were off 8.2 per cent after the US National Transportation Safety Board opened a field investigation of last week's fatal Tesla crash and vehicle fire. Twitter fell 12 per cent after short-seller Citron Research called the stock “most vulnerable” to privacy regulations.

Declining issues outnumbered advancing ones on the NYSE by a 2.12-to-1 ratio; on Nasdaq, a 3.36-to-1 ratio favoured decliners. Volume on US exchanges was 7.57 billion shares, compared to the 7.37 billion average for the full session over the last 20 trading days.

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