It was the latest measure intensifying U.S. penalties over China’s alleged abuses of ethnic and religious minorities in the western region, especially Xinjiang’s millions of predominantly Muslim Uyghurs. The Commerce Department also levied new sanctions targeting China’s Academy of Military Medical Sciences and its 11 research institutes that focus on using biotechnology to support the Chinese military.
Thursday’s sell-off on Wall Street took the S&P 500 0.9% lower to 4,668.67, erasing about half of its gains from the day before. The Nasdaq slid 2.5% to 15,180.43, its biggest drop since September. The Dow Jones Industrial Average slipped 0.1% to 35,897.64.
Several big technology companies weighed on the market. Apple slid 3.9% and Microsoft dropped 2.9%.
Small company stocks also took heavy losses. The Russell 2000 index gave up 2% to 2,152.46. All the major indexes are on pace for a weekly loss.
The sell-off followed a rally the day before when the Fed signaled plans to speed up its reduction in monthly bond purchases that have helped maintain interest rates low. The shift in policy sets the stage for the Fed to begin raising rates sometime next year.
Large technology companies often have lofty valuations based on assumptions about their profitability going far into the future. Investors tend to accept those higher valuations more easily when interest rates are extremely low, giving them fewer alternatives for returns. With interest rates poised to rise, investors are rethinking the high valuations they put on tech giants.