Economists warned the tariff spat could spike inflation and send shockwaves worldwide, prompting investors to dump winning stocks and mitigate risk.
The fears have battered technology stocks that led the market in the wake of Trump's presidential victory. The S&P 500 technology sector 1% Tuesday, building on a 3.5% loss from the previous session. It's down 7.6% since Trump's inauguration.
Tariffs may spike manufacturing costs for leading technology companies such as Apple and Nvidia that assemble and manufacture products outside the U.S.
Nvidia, the leading artificial intelligence chipmaker, fell nearly 9% on Monday in response to the tariffs and has plummeted more than 17% since Trump took office. Shares continued to slip Tuesday.
The company makes most of its chips in Taiwan but manufactures some more complex systems in other regions. Nvidia said it plans to produce some chips at Taiwan Semiconductor Manufacturing's facilities in the U.S. that were announced Monday.