Shares of Webull cratered almost 30% after a congressional committee concluded the brokerage platform does not operate as the independent American firm it presents itself to be. Investigators determined that the company's structure leaves U.S. customer data exposed to potential surveillance by Chinese authorities, a finding that immediately rattled investors and reignited broader scrutiny of Chinese-linked technology and financial platforms operating in American markets.
The selloff landed on a day when major U.S. indices were already under pressure. The S&P 500 slipped 0.6% to 7,771.07, the Dow Jones Industrial Average dropped 0.92% to 51,047.48, and the Nasdaq Composite fell 0.88% to 27,358.36. All three benchmarks remain well off their 52-week lows but are also pulling back from recent highs, with the S&P 500 now roughly 1% below its 52-week peak of 7,844.52 and the Dow nearly 7% under its own high mark of 54,744.33.
The congressional findings add Webull to a growing list of companies facing heightened Washington scrutiny over foreign ownership structures and data-security obligations, an area that has repeatedly moved markets when regulators or lawmakers single out individual firms. For a trading platform whose core business depends on user trust around account security and personal financial data, a national-security designation from Capitol Hill is a direct hit to its value proposition.
Investors will now be watching for Webull's formal response to the committee's conclusions, along with any signals from regulators about potential restrictions, forced divestitures, or enhanced disclosure requirements, the kind of remedies that have been applied to other China-linked platforms in the past. Any sign that U.S. brokerages or app-store distributors might reconsider their relationships with the company could extend the stock's losses further.
The episode also lands amid a broader market pullback, suggesting investors are in a risk-averse mood that could amplify reactions to company-specific bad news. With the S&P 500 and Nasdaq both retreating from near record territory, traders may be quicker to punish names carrying regulatory or geopolitical overhangs, making Webull's next moves - and Washington's next steps - worth close attention in the days ahead.