Stocks fell on Wednesday as new developments from Washington exacerbated concerns among investors about the US-China trade relationship.
Disappointing corporate earnings from companies including Texas Instruments and Netflix also weighed on the major averages.
The Dow Jones Industrial Average traded lower by 318 points, or 0.7%. The S&P 500 fell 0.6%, while the Nasdaq Composite fell 1%. At trading lows, the Dow was down more than 400 points, or about 1%, while the S&P 500 and Nasdaq were down 1.2% and 1.9%, respectively.
Shares fell on Wednesday after Reuters, citing a US official and three people briefed on US authorities, reported that the White House was considering restrictions on exports to China of US-made software. Sources said the plan is not the only option being considered and may not go ahead.
These developments come after President Donald Trump announced nearly two weeks ago that the US would impose export restrictions on “all critical software” by November 1.
Earlier in the day, stocks were already under pressure, hit by a 5% drop in Texas Instruments after the semiconductor firm’s latest earnings were weaker than expected. The company’s fourth-quarter earnings forecast was also weak.
Texas Instruments also hit the broader semiconductor sector. On Semiconductor fell 5% and Advanced Micro Devices fell 3%. Micron Technology, as well as the VanEck Semiconductor ETF (SMH), fell 2%.
Netflix shares were also a drag on the market. The streaming platform fell 9% after earnings beat estimates due to a dispute with Brazilian tax authorities.
