The Dow Jones Industrial Average declined by 78 points as Apple lagged. The S&P 500 pulled back 0.5%, with the tech sector dropping 1.5%. The Nasdaq Composite fell 1.4%.
Alphabet’s Google has suspended business with Huawei that involves transferring hardware, software and other technical services. The U.S. search giant’s decision follows President Donald Trump‘s administration adding Huawei to a list that required U.S. companies get a license to do business with the Chinese company. Bloomberg News also reported that companies like Intel, Qualcomm and Broadcom will not supply Huawei until further notice.
“If this remains enforced, it’s going to create some opportunity, but clearly companies are working with their compliance departments to get out of the way of this Huawei situation,” said Quincy Krosby, chief market strategist at Prudential Financial. That’s difficult because “Huawei has its tentacles in so many parts of technology sector. That’s why this is not a one-day event.”
Chipmaker stocks fell broadly. Nvidia, Advanced Micro Devices and Lam Research all traded down more than 2%. Shares of Micron Technology fell 4%. Telecom supplier Lumentum Holdings fell more than 1% after cutting its quarterly guidance.
Apple added to the market’s decline, sliding more than 3%.
The moves by the U.S. government and tech companies come as China and the U.S. try to strike a deal that would end the countries’ ongoing trade war. The U.S. hiked tariffs on $200 billion worth of Chinese goods earlier this month, and China retaliated by raising levies on $60 billion worth of U.S. imports.
CNBC reported on Friday that U.S.-China trade talks have stalled. Sources told CNBC’s Kayla Tausche that scheduling discussions had not happened as the U.S. increases pressure on Chinese telecom companies. Meanwhile, the South China Morning Post said that China was in no rush to continue trade talks.
Trade fears have hit stocks hard this month. The S&P 500 was down 2.9% for May through Friday’s close while the Dow and Nasdaq had both lost more than 3%.
However, a U.S. decision to remove tariffs on Canadian and Mexican steel and aluminum provided some relief for investors. Canada’s Foreign Minister Chrystia Freeland said Ottawa would move quickly to ratify the new North American trade pact.
–CNBC’s Sam Meredith contributed to this report.
The Invesco QQQ Trust Series I (QQQ) was trading at $180.89 per share on Monday afternoon, down $2.15 (-1.17%). Year-to-date, QQQ has gained 16.32%, versus a 7.21% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of CNBC.