US stocks slide following Facebook controversy over Cambridge Analytica

US stocks continue to decline as Facebook shares slumped 7.26 per cent following an onslaught of negative publicity over the Cambridge Analytica scandal.

The Nasdaq was down 2.19 per cent to 7, 318.00 at the time of writing, largely influenced by the allegations that data firm Cambridge Analytica mined Facebook users' data without their permission.

Cambridge Analytica has worked on high-profile operations including Trump's 2016 election campaign.

On Friday, Facebook suspended Cambridge Analytica and the researchers involved after saying it had learned in 2015 that a Cambridge University psychology professor had violated its policies by passing data to Cambridge Analytica from a psychology testing app he had built.

David Madden, market analyst at CMC Markets, said: "Geopolitical tensions are weighing on US equity markets again. Traders remain apprehensive that the US could go down the route of a trade war with China, and the West’s deteriorating relationship with Russia is also souring investor sentiment. Even though there haven’t been any developments on these fronts, investors can’t be convinced to start buying back into the market.

"Facebook shares are in the red today after it was revealed that Cambridge Analytica collected data from 50 million profiles on the social media site. The political analytics company was used by the Trump campaign in the US presidential election. This revelation does not bode well for the social media giant, and the negative publicity is likely to hit its revenue stream."

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