U.S. stock index futures fell on Monday as concerns about an intensifying fallout from a U.S. crackdown on Huawei weighed on market sentiment.
At around 7:15 a.m. ET, Dow Jones Industrial Average futures indicated were down 127 points, indicating a drop of 109 points at the open. S&P 500 and Nasdaq 100 futures traded lower as well.
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.
Chipmaker stocks fell broadly in the premarket. Nvidia, Applied Materials, Advanced Micro Devices and Lam Research all traded down more than 2%. Shares of Micron Technology fell 3.6%.
Apple added to the market’s decline, sliding more than 2%. Boeing shares declined 0.9%.
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.
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