Since the White House blacklisted Huawei last week, several companies have suspended business with the world's largest telecom equipment manufacturer. Google, owned by Alphabet (GOOGL.O), has suspended some of its business cooperation with Huawei, eliminating the need for software and hardware transfers and technology services outside the scope of open source (open source) licences, Reuters reported on Sunday. Lumentum (LITE.O), a maker of mobile phone accessories, announced that it had stopped shipping to Huawei.
According to Bloomberg, other chip manufacturers, including Intel (INTC.O), Qualcomm (QCOM.O), Xilinx and Broadcom (AVGO.O), will not supply to the Chinese company until further notice is received.
S&P 500 technology shares closed down 1.75%, the biggest drop among 11 major sectors. The Philadelphia Semiconductor Index, which includes Huawei suppliers Qualcomm, Broadcom and MU.O, plunged 4% to its lowest level in more than two months.
Apple Inc. (AAPL.O) fell 3.1 percent, making it the biggest drag on Wall Street's main stock index. The stock came under further pressure later, as HSBC warned that the latest round of tariff increases would lead to higher prices for Apple products, possibly with "dire consequences" for demand.
"Political risk is now a business risk," said Chad Morganlander, senior portfolio manager at Washington Crossing Advisors. "This may have a significant impact on the earnings expectations of many technology companies."
The Dow Jones industrial average. DJI fell 84.1 points, or 0.33%, to 25,679.9; the S&P 500 index. SPX fell 19.3 points, or 0.67%, to 2,840.23; and the Nasdaq index. IXIC fell 113.91 points, or 1.46%, to 7,702.38.
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