Tech and bank stocks led premarket losses for U.S. stocks amid rising trade war fears

Investing.com -- Technology and financial stocks are seeing significant declines in Monday’s premarket trading as concerns over President Donald Trump’s trade policies fueled fears of a potential recession in the United States.

Tesla (NASDAQ:TSLA) shares led the downturn among the so-called Magnificent Seven tech giants, plummeting 6.5%. The broader market reflected these concerns, with S&P 500 futures down 2.4% and Nasdaq 100 futures dropping 2.7%.

The downward trajectory in technology and semiconductor stocks is partly due to their heavy reliance on manufacturing, supply, and assembly operations outside the U.S., which are vulnerable in the current trade climate.

Tesla’s slide was mirrored by other companies in the technology sector. Notable chip stocks such as Nvidia (NASDAQ:NVDA) fell 6%, Intel (NASDAQ:INTC) by 4.3%, and Advanced Micro Devices (NASDAQ:AMD) by 4.5%.

Software (ETR:SOWGn) companies also experienced a downturn, with Atlassian (NASDAQ:TEAM) dropping 3.9% and Palo Alto Networks (NYSE:NASDAQ:PANW) by 4.6%.

The financial sector was not immune to the sell-off, with bank stocks extending losses after experiencing their biggest two-day drop since March 2020. JPMorgan (NYSE:JPM) declined by 2.5%, and Morgan Stanley (NYSE:MS) by 4.1%.

Cryptocurrency-linked stocks like Coinbase (NASDAQ:COIN) also saw a retreat as investors moved away from riskier assets.

Automotive stocks, particularly electric vehicle makers, were affected as well, with Rivian (NASDAQ:RIVN) and Lucid (NASDAQ:LCID) falling 5.7% and 4.8% respectively. Traditional automakers such as General Motors (NYSE:GM) and Ford (NYSE:F) also faced declines.

Adding to the market’s woes, U.S.-listed Chinese companies saw extended losses amid the escalating trade tensions between the U.S. and China. Alibaba (NYSE:BABA) and JD.com (NASDAQ:JD) were among the hardest hit, with declines of 7.4% and 6.5%, respectively.

Wolfe Research analysts provided insight into the market’s sentiment, stating, "With uncertainty continuing to percolate within markets at extreme levels, we believe economic data is likely to weaken in the near-term. Additionally, our expectation is that management teams are likely to be much more cautious with respect to forward guidance as earnings season is around the corner.

As a result, we expect the market’s focus to shift towards Fed cuts and potential fiscal stimulus in May/June."

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