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Huawei ban sends tech stocks tumbling, starting another week of losses

Google bars Huawei from Android updates

The U.S. decision to ban technology sales to China's Huawei hammered tech companies on Wall Street on Monday, extending stock losses into another week. Investors are worried the move against Huawei could crimp sales for companies, especially chipmakers, with revenue heavily tied to China.

Broadcom and Qualcomm are both suppliers of Huawei's and each get at least half their revenue from China. Their stocks, along with Micron Technology and Xilinx, fell sharply Monday.

The Huawei ban is also adding more anxiety to a market worried about further escalations in the trade war between the U.S. and China. Both sides have gone back and forth raising additional tariffs on goods. The uncertainty is putting a dent in investor confidence and has pushed stocks lower for the last two weeks.

"The impacts of a U.S. move to ban Huawei from U.S. telecom infrastructure and Google's decision to suspend business with Huawei are still playing out, but could easily close the door on progress ahead of a late June Trump-Xi meeting at the G20," Height Securities Clayton Allen said in a client note.

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Consumer-related stocks also fell heavily, led by Amazon and a smattering of other companies, including Nike and Starbucks.

T-Mobile and Sprint were among the few companies to make gains. An expected favorable regulatory decision is going to speed up their $26.5 billion merger.

Utilities and energy were the only sectors to post gains as investors looked for less-risky holdings. Utilities typically benefit when investors are concerned about a slowdown in economic growth and want to put their money into safer holdings.

Companies are nearing the end of the latest earnings season. The results have not been as bad as Wall Street feared, with profit in the broad S&P 500 index contracting less than 1%. Home repair retailer Home Depot will report its quarterly results Tuesday and retail giant Target will report results Wednesday.

The S&P 500 index fell 0.5% as of noon, while the Dow was down around 30 points, to 25,733, after an earlier drop of 139 points in the morning. The tech-heavy Nasdaq composite fell almost 1% by noon.

Chipmakers fell broadly as the sector deals with the fallout from the U.S. ban on technology sales to Huawei. The U.S. government says that Chinese suppliers, including Huawei and its smaller rival, ZTE Corp., pose an espionage threat because they are beholden to China's ruling Communist Party. Qualcomm, which gets about 65% of its revenue from China, fell 5.4%. Broadcom, which gets nearly half of its revenue from China, fell 4.4%. Intel fell 1.7% and Xilinx fell 5.9%.