The Dow Jones Industrial Average dropped just over 1 percent on Wednesday as big U.S. manufacturers and chipmakers bore the brunt of a deepening trade conflict between China and the United States.
Boeing and Caterpillar led the slide as a raft of major U.S. firms saw millions knocked off share values by the announcement of tariffs on $50 billion worth of the goods exchanged daily between the world's two largest economies.
President Donald Trump's claim on Twitter that the two countries were not in a trade war did little to cool fears that have been building since the White House launched new charges on steel and aluminum a month ago.
The S&P 500 opened below its 200-day moving average, a key technical level, and the Dow lost as much as 510 points before recovering some ground to stand 250 points lower at.
"The level of uncertainty has definitely surged," said Adam Sarhan, Chief Executive of 50 Park Investments in New York. "When you see China retaliate stronger than the U.S. that's a very strong signal that they mean business."
At 10:48 a.m. ET, the Dow was down 1.02 percent at 23,787.67. The S&P 500 fell 0.71 percent to 2,595.96 and the Nasdaq Composite dropped 0.81 percent at 6,885.06.
The declines were broad based, with 23 of the Dow's 30 components lower. The industrials index's 1.4 percent slide was the most among the 11 major S&P sectors, as has been the case since the trade war fears surfaced.
While Washington's list covered many obscure industrial items, Beijing's covers 106 key U.S. imports including soybeans, planes, cars, and chemicals.
Shares of Boeing, the single largest U.S. exporter to China, tumbled 3.8 percent. Caterpillar fell 3 percent.
Ford, General Motors and Fiat Chrysler fell between 0.2 percent and 0.8 percent as investors weighed the competing impacts on their global operations and production.
While manufacturers were the bigger losers as a group, the technology sector's 1.3 percent drop weighed the most on the market.
Major tech names Apple and the FANG group – Facebook, Amazon, Netflix and Alphabet were down between 0.3 percent and 2.9 percent.
Chipmakers, many of which have the highest revenue exposure to China among S&P 500 companies, also fell. 28 of the 30 constituents of the Philadelphia semiconductor index were lower.
"As a sector, technology has the most to lose from a world in which global trade is restricted and of course, some of the subjects of the tariffs, will also be hit," said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey.
Among the few bright spots was housebuilder Lennar, whose shares jumped 6.8 percent after it reported quarterly revenue that beat estimates as it sold more homes at higher prices.