Tech sector leads stock losses as trade fears persist

Wall Street capped a choppy week Friday with a second-straight weekly loss for the S&P 500 as worries about a potential escalation in the trade war between the U.S. and China erased early gains.

Technology companies led the broad slide as investors weighed a report saying President Donald Trump’s administration is considering ways to limit U.S. investments in China. Bloomberg cited unnamed people familiar with the administration’s internal discussions.

The S&P 500 index fell 15.83 points, or 0.5%, to 2,961.79. The benchmark index finished the week with a 1% loss. Even so, it remains 2.1% below its alltime high set in July.

The Dow Jones industrial average dropped 70.87 points, or 0.3%, to 26,820.25. The Nasdaq, which is heavily weighted with technology stocks, lost 91.03 points, or 1.1%, to 7,939.63.

Investors also shifted money out of smaller companies’ stocks, which pulled the Russell 2000 index down 12.85 points, or 0.8%, to 1,520.48.

Bond prices were little changed. The yield on the 10-year Treasury note held at 1.68%.

Uncertainty over the longrunning trade war has fueled volatility in the market and stoked worries that the impact of tariffs and other tactics employed by the countries against each other is hampering U.S. economic and corporate profit growth.

The possibility that the U.S. is weighing another way of applying pressure on China dampened investors’ already cautious optimism that the world’s two biggest economies might make progress as their representatives resume negotiations next month.

“Here we are, just two weeks out, and now we’re doing things to sort of ruffle feathers again,” said Randy Frederick, vice president of trading & derivatives at Charles Schwab. “That kind of spooked the market.”

Negotiators are due to meet early next month in Washington for a 13th round of talks aimed at ending the dispute over trade and technology that threatens to tip the global economy into recession.

Technology stocks, which are particularly sensitive to swings in the trade conflict, accounted for much of the selling Friday. Microsoft slid 1.3% and Adobe dropped 2.2%. Micron Technology led the sector’s slide after the chipmaker issued a weak profit forecast and a sales warning, citing the trade war. The stock slumped 11.1%, the biggest decliner in the S&P 500.

Communications stocks also took heavy losses. Twitter lost 2.6% and Activision Blizzard fell 3.5%.

The market has been in a slump all week as investors pull back amid trade war worries, reports of sluggish economic growth and an impeachment inquiry into Trump.

The tech-heavy Nasdaq bore the brunt of the selling. It finished the week with a 2.2% loss. Smaller companies’ stocks had a particularly rough week. The Russell 2000 ended the week down 2.5%.

For some stocks, this week has been their worst of the year. Facebook is off 6.8% for the week after media reports suggesting the Department of Justice is considering opening an antitrust investigation into the social media company.

Financial stocks bucked the broader market slide Friday, with Wells Fargo leading the way. The bank’s shares climbed 3.8% after it named its third chief executive officer in as many years. Charles Scharf, currently CEO of Bank of New York Mellon, will take over from C. Allen Parker. The company has been involved in a series of scandals since 2016 with the uncovering of millions of fake checking accounts its employees opened to meet sales quotas.