SINGAPORE (May 28): Nasdaq 100 Index futures fell on a report that said US President Donald Trump was preparing to sign an executive order that could threaten to penalise Facebook Inc, Google, and Twitter Inc for the way they moderate content on their sites.
Contracts for June delivery on the Nasdaq 100 fell as much as 0.8%, before paring losses to 0.4% as of 9.32am in London. Trump’s upcoming executive order aims for federal regulators to review a law that spares tech companies from liability for comments and content posted by users, the Washington Post reported. Investor sentiment was also damped by deteriorating US-China ties.
“US tech stocks are dropping on profit-taking and risk aversion, as they are at the forefront of the US-China cold war,” said Nader Naeimi, the head of dynamic markets at AMP Capital Investors Ltd in Sydney. In addition, there is news that “Trump is preparing to sign an executive order that could threaten to penalise Facebook, Google, and Twitter”.
Trump is poised to take action today that could bring a flurry of lawsuits down on Twitter, Facebook, and other technology giants by having the government narrow liability protections that they enjoy for third parties’ posts, according to a draft of an executive order obtained by Bloomberg.
While Nasdaq 100 futures declined, contracts on other indexes were mixed. Futures on the S&P 500 were little changed and those on Dow Jones Industrial Average advanced 0.4%. The underlying S&P 500 climbed to the highest since early March yesterday, holding above 3,000 level and its average price for the past 200 days.
It is possible that Nasdaq futures are falling on reports of an executive order, “but the US First Amendment is pretty clear, and the White House has very little reach over corporate behaviour”, said Michael McCarthy, chief market strategist at CMC Markets Asia Pacific Pty. “Most traders I speak to see this as a hollow threat.”