U.S. stock markets slip on trade policy fears

The Trump administration’s trade policies began to weigh heavily on Wall Street on Monday amid rising fears that U.S. companies would pay a price for retaliatory tariffs and prohibitions on Chinese investment.

Tech shares joined industrials in a sharp stock sell-off as U.S. markets opened, after reports that President Donald Trump was considering restrictions on Chinese investment in U.S. technology companies.

The tech-heavy Nasdaq composite index and the tech sector of the S&P 500 both suffered drops of more than two per cent, outpacing the fall in the broader stock market by the early afternoon.

Semiconductor companies were especially hard hit.

Chipmakers Micron Technology and AMD were both down nearly eight per cent.

Intel dropped nearly four per cent.

Even more worrisome for investors, concern about the impact of trade seemed to be spreading to some giant tech companies — Apple, Google’s parent Alphabet and Microsoft among them — which, because of their size, have a large impact in stock market indexes.

The S&P 500’s industrial sector fell more than one per cent, led by drops in iconic U.S. manufacturers like aircraft maker Boeing and machinery manufacturer Caterpillar, both of which have large and important markets in China.

Harley-Davidson shares dropped more than six per cent after the company announced it would be shifting some production to Europe to avoid European tariffs on its motorcycles.