Stocks of three leading tech companies in China crashed in pre-market trading today, logging a combined loss of almost 10 percent, and casting more dark clouds ahead for the country's economy already encumbered with numerous problems.
JD.com plunged 2.4 percent, while Baidu and Alibaba have both weakened 2.6 percent and 4 percent, respectively. On Wall Street, broader indexes that include the Dow Jones Industrial and S&P 500 exchange-traded funds also plunged 0.94 percent and 1.3 percent late Tuesday.
The Technology Select Sector SPDR Fund was also down 1.5 percent, while ETFs at the semiconductor sector and iShares S&P NA also lost 2.4 percent and 2.5 percent, respectively.
European and American shares also plummeted early Tuesday after the Trump administration blacklisted China's major tech firms over allegations of human rights violations, prompting the communist state to hint it may be forced to take trade retaliatory measures against the West.
The deepening animosity between Washington and Beijing come days prior to a scheduled high-level economic meeting among trade officials from the two economic superpowers, toning down hopes of a long-sought understanding to put closure on their trade drama. The talks are set to resume, Thursday.
China's economy is not doing any better as it should. This trade discord has put tremendous pressure on the country's industrial and financial markets in the past 15 months. Its tech companies have been especially the ones feeling the pinch, with Tuesday's ticker showing mostly red.
Indexes in most of Asia settled lower after several days of holiday time-out. The Shanghai Composite Index was down 0.2 percent, Hong Kong's Hang Seng Index inched lower at 0.3 percent while in Tokyo, the Nikkei declined 1 percent.
While stocks of Alibaba and JD.com have made an impressive performance in the first two quarters this year, the Chinese tech behemoths were still trading under their all-time peaks. Shares of JD.com collapsed 61 percent between January and December of 2018. Though the stock has rallied 32 percent (year-to-date), it's was still trading 43 percent below its record peak.
Baidu has also shed a considerable amount of investor money, as well. It has declined over 60 percent since May last year. The stock was trading 6.5 percent above its 52-week low. Alibaba, on the other hand, has been likewise shaky. However, it has still dropped more than 20 percent since July last year.