Apple, Amazon and other big tech names fell. Banks and consumer-focused companies and media and communications stocks also took heavy losses.
The Dow Jones industrial average fell 2.3 percent, or 601 points, to close at 25,387 The broader S&P 500-stock index dropped 2 percent, while the Nasdaq slid 2.8 percent. The Russell 2000 index of smaller companies gave up 1.5 percent. Bond trading was closed for Veterans Day.
“Tech is definitely weighing [on the market],” said Lindsey Bell, investment strategist at CFRA. “The question really is growth. We continue to like tech going into next year, but we think it could be a little bit of a rocky period for the group as we continue through the last two months of the year.”
Apple tumbled 5 percent to $194.24 after Wells Fargo analysts said the iPhone maker is the unnamed customer that optical communications company Lumentum Holdings said was significantly reducing orders. Shares in Lumentum plunged 32 percent to $38.03. Amazon gave up 4.5 percent to $1,634.45.
Several chipmakers were trading lower as part of the slide in technology companies. Advanced Micro Devices gave up 8.2 percent to $19.29, while Nvidia fell 7.1 percent to $191.01. Micron Technology lost 3.6 percent to $37.72.
Banks and other financial companies also took heavy losses. Goldman Sachs slid 6.8 percent to $207.40. “Expectations are really that the deregulation process that has benefited banks up to this point is going to be slowed down with the Democrats in charge,” Bell said.
While the market has typically thrived in periods of divided government, investors continue to grapple with uncertainty over the U.S.-China trade dispute and the potential impact of increased oversight of Corporate America by Democrats, who will be taking over leadership in the House of Representatives in January.
In addition, some companies have recently reported third-quarter earnings and outlooks that have stoked investors’ worries about the future growth of corporate profits.
While companies got a boost this year from the lower tax rates put in place by President Donald Trump and the GOP last December, several companies have recently warned about the impact of higher costs related to tariffs and rising interest rates.
About 90 percent of S&P 500 companies have reported third-quarter results so far, with some 51 percent of those posting earnings and revenue that topped Wall Street’s forecasts, according to S&P Global Market Intelligence. Several big retailers are due to deliver results this week, including Walmart, Home Depot, Williams-Sonoma, Nordstrom and J.C. Penney.