US stocks drop as Huawei ban hits tech shares

May 20, 2019

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Wall Street stocks dropped on Monday amid increasing worries over US-China trade talks and US restrictions on Huawei. — Reuters/File
Wall Street stocks dropped on Monday amid increasing worries over US-China trade talks and US restrictions on Huawei. — Reuters/File

Wall Street stocks dropped early on Monday amid worries over United States-China trade talks and as US government restrictions on Chinese company Huawei hit American technology companies.

About 15 minutes into trading, the Dow Jones Industrial Average stood at 25,661.41, down 0.4 per cent.

The broad-based S&P 500 had shed 0.6pc to 2,842.14, while the tech-rich Nasdaq Composite Index had tumbled 1.4pc to 7,704.41.

US stocks have been volatile the last two weeks as the prospect of a trade agreement between Beijing and Washington has been shaken by fresh tariff announcements on both sides.

In the midst of a trade war with Beijing, President Donald Trump has barred US companies from engaging in telecommunications trade with foreign companies said to threaten American national security, a move targeting Chinese giant Huawei.

Google, which makes the Android system used on many smartphones, said it was complying with the US order.

Google parent Alphabet fell 2.3pc, while shares of chip companies Qualcomm and Intel also retreated after US news reports said they had stop supplying Huawei.

Among other companies, US shares of Deutsche Bank lost 2.2pc following a New York Times report that the bank failed to forward suspicions about transactions involving US President Donald Trump to American authorities.

A Deutsche Bank spokesman disputed the article.