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Big Tech lags S&P 500 by most since March on China-blowback fear
[NEW YORK] US technology stocks, especially semiconductors, were caught in a downdraft on Monday as concern mounts about a tit-for-tat trade retaliation and possible limits on Chinese investments in the US. The technology-heavy Nasdaq 100 dipped as much as 2.9 per cent, the most since April 6, compared with a 1.9 per cent loss in the S&P 500. The performance gap is the widest since March, data compiled by Bloomberg shows.
President Donald Trump threatened "more than reciprocity" in a tweet on Sunday afternoon, "insisting that all countries that have placed artificial Trade Barriers and Tariffs on goods going into their country, remove those Barriers & Tariffs".
The Philadelphia Semiconductor Index slid as much as 4.4 per cent, the most since April 19, as 29 of the index's 30 members are lower, led by Smart Global Holdings and Micron Technology Inc. Intel Corp is also helping drive the sector lower after Nomura downgraded the stock, noting its valuation will likely remain "subdued for the remainder of 2018."
Although concern about the status of global trade has been building for some time, stocks such as Netflix Inc -which hit record highs last week - have so far managed to hold up. On Monday, however, all members of the FANG+ Index traded lower.
Mr Trump is doubling down on his stance that "trade must be fair and no longer a one way street!" But China and Europe have warned that a trade war could possibly push the world into a global recession.