US stocks closed lower on Monday as souring US-China trade relations continued to weigh on sentiment with Washington’s restrictions on Huawei Technologies hitting the technology shares.
The Dow Jones Industrial Average fell 84 points, or 0.33%, to 25,680, the S&P 500 lost 19 points, or 0.67%, to 2,840, and the Nasdaq Composite dropped 114 points, or 1.46%, to 7,702.
Since the White House added Huawei to a trade blacklist last week, several companies have suspended business with the world’s largest telecom equipment maker.
Alphabet Inc’s Google has moved to stop providing Huawei with access to its proprietary apps and services. Mobile phone parts producer Lumentum Holdings Inc also announced that it has discontinued shipments to Huawei.
Bloomberg News reported yesterday that Xilinx and other US chip makers, including Intel, Qualcomm Corp. and Broadcom Inc. have frozen the supply of critical software and hardware components to Huawei.
S&P 500 technology stocks fell 1.75%, the largest percentage decline among the benchmark index’s 11 major sectors. The Philadelphia Semiconductor Index, which includes Huawei suppliers Qualcomm, Broadcom and Micron Technology Inc, tumbled 4% to hit its lowest level in more than two months.
Apple’s stocks slumped 3.1%, making them the biggest drag on Wall Street’s major indexes, after HSBC warned that higher prices for the company’s products following the latest increases in tariffs could have “dire consequences” on demand.
On the positive side, shares of Sprint Corp and T-Mobile US Inc advanced after Federal Communication Commission Chairman Ajit Pai came out in favour of the merger of the two telecom companies. Sprint shares ended 18.8% higher while T-Mobile shares rose 3.9%.
Dish Network Corp shares fell 5.9% after the company said it would buy broadcast satellite service assets from EchoStar Corp in an $800 million deal.
In Asia, shares were mixed on Tuesday in morning session amid continued trade tensions between the US and China.
Mainland Chinese shares rose in early trade, with the Shanghai composite gaining more than 0.2% and the Shenzhen component adding 0.37%. The Hang Seng index in Hong Kong, on the other hand, slipped 0.23%.
The Nikkei 225 in Japan declined 0.45%, while the Topix index also fell 0.62%. Over in South Korea, the Kospi rose 0.38%. Australia’s ASX 200 was 0.16% lower.