By Akane Otani, Michael Wursthorn and Allison Prang

U.S. stocks tumbled Monday, heading for their biggest one-day slide in months, as fresh escalations in the global trade conflict sent investors fleeing from some of the market's most-beloved technology firms.

Fresh jabs between the White House and China exacerbated investor fears about a full-blown trade war. President Donald Trump is moving to bar Chinese companies from investing in U.S. tech firms and block additional tech exports to the country, in his latest effort to pressure Beijing. Chinese President Xi Jinping told a group of multinational chief executives that Beijing would "punch back."

The blue-chip index fell as much as 446 points as investors worried that the war of words between Washington and Beijing has the potential to spiral further, crimping corporate profits and disrupt economic growth around the world.

The Dow was recently down 365 points, or 1.5%, at 24216. The S&P 500 dropped 1.5%, and the tech-heavy Nasdaq Composite fell 2.4%.

Monday's selling entangled a sector of the stock market that had been relatively resilient to the rise in trade tensions over recent months. Technology stocks have been a standout in the S&P 500 this year, rising 9.5% compared with the S&P 500's 1.5% gain. Companies like Twitter, Nvidia and consumer-discretionary firm Amazon.com have surged more than 40% apiece as investors funneled money into firms upending everything from communication to brick-and-mortar retail.

Some analysts said the technology sector's resilience in the face of steep declines in industrial conglomerates and agricultural firms reflected bets among investors that technology firms would be among the least exposed to tariffs that China and the European Union have imposed on the U.S.

Yet the selling Monday, which put the Nasdaq on course for its biggest one-day percentage decline since March, laid bare the vulnerability of those assumptions: showing investors that even firms that have posted remarkable earnings growth this year are susceptible to ruptures in global trade.

Technology companies in the S&P 500 pull in about 59% of their revenues from overseas, giving them the highest foreign exposure of the broad index's 11 sectors, according to FactSet and BofA Merrill Lynch data.

Investors around the globe have been spooked by the prospect of a full-blown trade war between the U.S. and China. While the tariffs so far announced by the U.S. administration -- and China's retaliatory measures -- amount only to a small number of goods, analysts fear that tensions could escalate and spread across other major economies.

Joseph Amato, chief investment officer at Neuberger Berman, said that trade has been the main focus for investors, but most portfolio managers at his firm don't see it becoming a big disruption to the world economy.

The market also isn't concerned about tariffs that affect a small portion of goods, he said, noting there are "many other ways that the Chinese could impact the U.S. economy."

"That's what the market's worried about," he said.

Stock losses were global, with the Stoxx Europe 600 falling 2% and Hong Kong's Hang Seng down 1.3%.

In Europe and emerging markets such as China, recent economic data has pointed to weaker growth than earlier in 2018, further damping investor sentiment. On Monday, the monthly Ifo Business Climate Index suggested German business sentiment deteriorated further in June.

"We've moved away from the synchronous global expansion," said Bob Baur, chief global economist at Principal Global Investors, who believes global growth peaked around February of this year, but that "the U.S. is still gaining momentum."

Write to Akane Otani at akane.otani@wsj.com and Michael Wursthorn at michael.wursthron@wsj.com and Allison Prang at allison.prang@wsj.com

(END) Dow Jones Newswires

June 25, 2018 13:40 ET (17:40 GMT)

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