The social media giant Facebook (FB - Free Report) saw the worst day in nearly four years as its shares tumbled 6.8% on Monday trading session and wiped out $36.4 billion from the company’s market value.

The steep decline came as the data breach reports sparked concerns over how Facebook manages third-party access to user data. The reports from New York Times and London's Observer disclosed over the weekend that data analytics firm Cambridge Analytica, which had ties to the Trump campaign, gained inappropriate access to data on more than 50 million Facebook users. This has sparked broader concerns about data privacy and security, and will likely lead to increased scrutiny over data security and possible regulatory pressure.

The news has taken a toll not only the broader technology sector but the broad U.S. market as well. Both the S&P technology index and tech-heavy Nasdaq Composite Index witnessed the worst one-day fall since the sell-off in early February, declining 2.1% and 2.5%, respectively. In particular, other stocks in FAANG group, namely Amazon (AMZN - Free Report) , Apple (AAPL - Free Report) , Netflix (NFLX - Free Report) and Alphabet (GOOGL - Free Report) also saw terrible trading, losing 1.7%, 1.5%, 1.6% and 3.0%, respectively. These stocks led the market higher over the past two years.

Other social media companies like Twitter (TWTR - Free Report) and Snap (SNAP - Free Report) also dipped 1.7% and 3.5%, respectively.

Currently, Facebook has a Zacks Rank #2 (Buy) and a Growth Score of B, suggesting that it is primed for growth in the coming months. It saw solid earnings estimate revision of 58 cents for this year over the past 60 days and has an estimated growth rate of 16.72%. Revenues are also expected to grow 36.3% for this year. However, the networking giant belongs to the bottom-ranked Zacks industry (bottom 30%), which signals some pain in the near term.

With the latest slide, the stock is down 11.6% from the latest peak, signaling that it has entered correction territory. This could lead to more volatile trading in the days ahead.

ETF Impact

The terrible trading also sent technology ETFs space into deep red on the day. In particular, SPDR S&P Internet ETF (XWEB - Free Report) , PowerShares Nasdaq Internet Portfolio (PNQI - Free Report) , First Trust Dow Jones Internet Index Fund (FDN - Free Report) ) and iShares Dow Jones US Technology ETF (IYW - Free Report) stole the show, tumbling more than 2% on a single trading day.

Below we profile these ETFs in detail and discuss some of the specifics behind their recent slump:

XWEB

This product targets the Internet corner of the broad tech space. It tracks the S&P Internet Select Industry Index and holds 68 stocks in its basket with an equal-weight exposure. The fund has accumulated $4 million in its asset base and charges 35 bps in fees from investors. It carries a Zacks ETF Rank #3 (Hold).

PNQI

The fund follows the Nasdaq Internet Index, giving investors exposure to the broad Internet industry. It holds about 82 stocks in its basket with AUM of $687 million while charging 60 bps in fees per year. In terms of industrial exposure, Internet software and services makes up for 51.7% share in the basket, followed by Internet retail (39.5%). PNQI has a Zacks ETF Rank #3 with a High risk outlook.

FDN

This is the most popular and liquid ETF in the broad technology space with AUM of $7.3 billion. It follows the Dow Jones Internet Composite Index and holds 42 stocks in its basket. Expense ratio comes in at 0.54%. While information technology makes up for a bigger chunk with 69.8% share, consumer discretionary accounts for 20.7% of assets. The product has a Zacks ETF Rank #2 (Buy) with a High risk outlook.

IYW

This ETF tracks the Dow Jones US Technology Index, giving investors exposure to 137 technology stocks. The fund has AUM of $4.4 billion and charges 44 bps in fees and expenses. More than half of the portfolio is allocated to software and services, while technology hardware and equipment accounts for 25% share. The fund has a Zacks ETF Rank #2 with a Medium risk outlook.

What Lies Ahead?

Despite the slide, the outlook for the sector is promising. This is especially true as the tech sector appears fully emerged from the burst of the dot-com bubble. The emergence of cutting-edge technology such as cloud computing, big data, Internet of Things, wearables, VR headsets, drones, virtual reality, and artificial intelligence (AI) as well as strong corporate earnings are acting as the key catalysts.

Additionally, the twin tailwinds of Trump’s tax reform plan and a rising interest rate scenario are pushing the stocks higher. This is because tech titans hoard huge cash overseas and are poised to benefit the most from the reduced tax rates. Most of the tech companies are sitting on a huge cash pile and are in a position to increase payouts to their shareholders. The cash reserves will ensure that these companies are not plagued by financial trouble in a rising interest rate environment.

Adding to the strength is a pickup in the economy and better job prospects that are giving a solid boost to the economically sensitive growth sectors like technology, which typically perform well in a maturing economic cycle. With the global economy gathering momentum, technology companies are likely to outperform and less susceptible to interest rates or deregulation.

Given the solid long-term outlook but somewhat bearish near-term sentiments, investors may want to consider staying on the sidelines for the time being. However, risk tolerant long-term investors may want to consider this recent slump a buying opportunity, should they have the patience for extreme volatility.

Moreover, ETFs have diversification benefits as they are spread out exposure to a number of firms in various types of industries and can easily counter shocks from some of the industry’s biggest components.