Technology stocks have plunged more than 7% since President Donald Trump took office in January, with new trade measures sparking a trade war and further fueling risk aversion on Wall Street. Economists have warned that the trade dispute could stoke inflation and send shock waves around the world, prompting investors to sell profitable stocks to reduce risk.
The concerns have hammered technology stocks, which have led the market since Trump was elected president. The technology sector of the S&P 500 fell 1% on Tuesday, following a 3.5% decline in the previous session. The sector has fallen 7.6% since Trump took office.
For leading technology companies like Apple and Nvidia, which assemble and manufacture their products outside the United States, the trade war could significantly increase their manufacturing costs.
Nvidia, the leading artificial intelligence chip maker, saw its stock price fall nearly 9% on Monday and has plummeted more than 17% since Trump took office. Its shares continued to slide Tuesday.
The company makes most of its chips in Taiwan, but it also makes some more complex systems elsewhere. Nvidia said it plans to produce some chips at a U.S. factory announced by TSMC on Monday.
Semiconductor stocks have also underperformed, with the Wind Semiconductor ETF down nearly 14% since Trump took office. AMD Semiconductor's shares fell about 20%, while those of Broadcom and Marvell Technology fell more than 21% and 31%, respectively.
Big tech stocks and Elon Musk-backed Tesla have lost a third of their value since Trump took office. Shares of Google parent Alphabet fell about 15%, and Microsoft and Amazon both fell by at least 10%. Apple shares rose 3%.
On Monday, Trump dashed hopes of a potential last-minute deal, clearing the way for a 25% tax on Canada and Mexico. Trump said that after weeks of negotiations, there was "no room" to discuss other options.
Canada said it would implement retaliatory tariffs as early as Tuesday, and Mexico was preparing to unveil plans for retaliation on Sunday.