By Avantika Chilkoti and Michael Wursthorn 

Shares of technology companies fell Monday after some U.S. businesses moved to comply with the Trump administration's decision to put Huawei Technologies on a trade blacklist, pushing the S&P 500 lower to start the week.

Google parent Alphabet and other tech companies moved to cut Huawei's access to their technology, sending shares of those companies lower to extend the broad index's latest bout of volatility.

Investors worry the moves against Huawei will further inflame trade tensions between the U.S. and China, which have deteriorated in recent weeks following a new round of tariffs from both sides.

"These restrictions have raised concern that the trade war is more broadly aimed at containing China as an economic threat rather than revising unfair trade arrangements," said Jason Pride, chief investment officer for private clients at Glenmede Trust Co.

The S&P 500 fell 0.5% in recent trading, while the Dow Jones Industrial Average slipped 58 points, or 0.2%, to 25705. The tech-heavy Nasdaq Composite fell further, shedding 1.2%.

Alphabet will restrict Huawei's access to certain Android features, while Qualcomm has suspended shipments to Huawei of its chips, The Wall Street Journal reported. The moves come after the Trump administration's decision last week to curb the Shenzhen-based telecom giant's access to U.S. technology.

Shares of Alphabet declined 2.1% in the wake of the news, while Qualcomm slid 5.4%. Chip makers were broadly hit, with the PHLX Semiconductor Index falling 3.3% in recent trading.

But while much of the selloff focused on companies tied to the latest Huawei developments, several other technology and communication stocks also stumbled as investors weighed the likelihood of a rebuttal from China.

Shares of Apple, for example, slid 3.3% after HSBC cut the iPhone maker's price target, citing the company's exposure to the trade conflict between the U.S. and China.

Tesla shares, meanwhile, fell to their lowest level in a year after analysts cited concerns around the electric car maker's growth prospects and the underlying demand for its Model 3 vehicle. Shares were recently down 2.5%.

Including Monday's declines, the S&P 500 has given up more than 3% this month since trade tensions re-emerged.

Investors are now positioning themselves for more bouts of volatility, a sign that many expect the market's erratic swings to continue. Assets in exchange-traded funds that tend to profit when volatility rises hit a record $3.1 billion in May, according to FactSet data.

"The recent action against Huawei confirms our view that the relationship between Washington and Beijing will remain tense," analysts at UBS Group AG's global wealth-management arm wrote in a note to clients. "The growing rivalry between the world's two largest economies will simmer in the background, with repercussions on business and investments."

Stocks around the world mostly fell. The Stoxx Europe 600 slid 1.1%, as most regional indexes notched declines. In Asia, the Shanghai Stock Exchange dropped 0.4% and Hong Kong's Hang Seng Index declined 0.6%. Japan's Nikkei Stock Average gained 0.2%.

Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com and Michael Wursthorn at Michael.Wursthorn@wsj.com

(END) Dow Jones Newswires

May 20, 2019 14:59 ET (18:59 GMT)

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