Wall Street’s sell-off resumed on Wednesday as a drop in the shares of large technology companies dragged stocks to their fifth decline in the last six sessions.
The S&P 500 fell more than 2 percent while the tech-heavy Nasdaq composite dropped 3 percent.
Apple, Microsoft, Alphabet and Amazon were all sharply lower. The tech giants had led a recovery in markets this year, lifting the S&P 500 to a record high early this month.
But stocks have been retreating since that Sept. 2 peak, as investors rotated out of the high-flying tech shares and concerns grew about the state of the economy. A key worry has been Washington’s inability to reach a deal on a new economic aid package, and the gridlock between Democrats and Republicans has only worsened since the death of Justice Ruth Bader Ginsburg last week.
U.S. stocks have already tumbled for three consecutive weeks and the S&P 500 is down nearly 10 percent from its Sept. 2 record. A drop of that size is deemed a correction, and is taken by some investors as a confirmation that a long-term retreat is underway.
Many analysts believe the death of Justice Ginsburg has made it all but impossible for Congress to pass additional legislation aimed at helping the economy. The fight over filling her seat will most likely take up most of the oxygen in Washington ahead of Election Day on Nov. 3.
“You’re not going to see anything coming from Washington that’s going to be even marginally productive between now and then,” said Doug Rivelli, president of the institutional brokerage firm Abel Noser in New York.
But economists, including the Federal Reserve chair, Jerome H. Powell, have repeatedly noted that spending by Washington is essential to shoring up the economy.
“The power of fiscal policy is unequaled, by really anything else,” Mr. Powell said during congressional testimony on Wednesday. “I think it’s likely that we’ll need more fiscal support.”
Mr. Powell pointed out that 11 million people haven’t gone back to work, and “there’s a long way to go.”“We need to stay with it, all of us,” he said. “The recovery will go faster if there’s support coming both from Congress and from the Fed.”
Shares of Tesla fell more than 10 percent, a day after Elon Musk, the company’s chief executive, said the company still had a lot of work to do to make cheaper, more powerful batteries for its electric cars.
Nike was the best performing company in the S&P 500. Its shares jumped about 9 percent, after the sportswear brand reported a surge in online sales.