Worries about the fallout from U.S. restrictions on Huawei Technologies stoked fears about a hit to the broader technology sector, sending stocks south. The Nasdaq was the biggest decliner, down 1-and-a-half percent..
Chip stocks got slammed. U.S. suppliers of Huawei such as Qualcomm, Micron Technology and Broadcom fell. After the U.S. placed Huawei on a trade blacklist, Google suspended some business with the Chinese telecom giant, and mobile phone parts maker Lumentum Holdings said it would suspend shipments to Huawei. Shares of Lumentum and Google's parent, Alphabet declined.
Global X Funds research head, Jay Jacobs:
SOUNDBITE: GLOBAL X FUNDS RESEARCH HEAD, JAY JACOBS (ENGLISH) SAYING:
"Part of this information was already well known on Friday, and the markets really didn't do a good job digesting it. And it was not until this morning, over the weekend wehre companies started to announce, 'Yeah, this is really bad, and we have to respond to this,' meaning we're going to stop sales, file for exemptions, and the market is really trying to process this information."
Investors feared China might retaliate, so they sold off shares of Huawei's rival in the smartphone market, Apple.
Sprint shares catapulted higher after its proposed merger with T-Mobile US got the blessing of the chair of the Federal Communications Commission. T-Mobile shares also rose.