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PHOTO: EITAN ABRAMOVICH/AFP/Getty Images
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(CNN Business) —  

The jittery stock market is once again heading south.

The Dow dropped 327 points, or 1.3%, on Thursday, with selling accelerating after Treasury Secretary Steven Mnuchin backed out of a conference in Saudi Arabia. The index had been down 471 points at one point.

Tech stocks fell sharply, sending the Nasdaq tumbling 2.1%. Netflix declined 5%, while Facebook and Amazon lost about 3% apiece.

Stock market volatility is back on Wall Street. Fears about rising bond yields and the US-China trade war sparked heavy selling last week, the worst for all three major indexes since March. Stocks rebounded sharply on Tuesday, before another wobbly session on Wednesday. The CNN Business Fear & Greed Index of market sentiment is flashing “extreme fear.”

The market slide gathered steam on Thursday after Mnuchin announced on Twitter that he will not participate in the Saudi summit. Mnuchin said it was a joint decision with President Donald Trump and Secretary of State Mike Pompeo. An administration official told CNN that no other government officials will attend the event in Mnuchin’s place.

The news adds to rising global uncertainties, including concerns about Italy’s budget and a plunge in China’s stock market.

David Kotok, chief investment of Cumberland Advisers, said he believes Thursday’s market slide was driven more by concerns about Italy and China.

“But Mnuchin doesn’t help things,” said Kotok.

Mnuchin’s announcement points to elevated tensions between the United States and Saudi Arabia over the disappearance of Washington Post journalist Jamal Khashoggi.

Saudi Arabia has threatened to retaliate against potential US sanctions. The kingdom is the world’s largest oil exporter, giving it great sway over global energy prices. US oil prices briefly bounced on the Mnuchin news but closed lower on the day.

Saudi Arabia has also played a huge role financing the rise of Silicon Valley, serving as the tech industry’s unofficial banker.

But the market has also been pressured by other international developments. Even before Mnuchin’s tweet, analysts pointed out that Italian bond yields spiked due to concerns about Italy’s budget proposal. The European Union plans to send a formal warning letter to Rome to signal displeasure over plans to increase Italy’s budget deficit, Reuters reported.

Chinese markets were also under pressure. The Shanghai Composite plunged nearly 3% overnight, falling deeper into a bear market as the US-China trade war continues to linger.

US investors continue to move money out of the riskiest parts of the market and into defensive areas. While tech stocks fell sharply, defensive areas such as utilities and telecom rose slightly.

“There is a rotation away from the tech and momentum names,” Kotok said. “One has to ask: Has FANG been defanged?”