(Reuters) – Wall Street’s main indexes fell more than 2 percent on Friday in a broad sell-off led by declines in big Internet and technology shares, and posted their largest weekly percentage drops since March as concerns over U.S.-China trade tensions and interest rates convulsed Wall Street.
The S&P 500 erased virtually all of its gains from a week earlier, when the benchmark index notched its biggest weekly rise in seven years.
Following a weekend truce between Washington and Beijing in talks in Argentina, stocks have been volatile all week as investors comb through the news looking for signs of whether a trade-tension cloud over the stock market would dissipate.
Concerns over U.S.-China trade relations were fanned by White House trade adviser Peter Navarro’s comments that U.S. officials would raise tariff rates if the two countries could not come to an agreement during a 90-day negotiating period.
Along with trade, Wall Street has been focused on bond yields and the direction of interest rate policy from the Federal Reserve, with some investors expecting a slower pace of hikes than previously anticipated.
“It’s a crisis of confidence on the trade situation, what’s going to happen there, and maybe a little bit of a crisis of confidence in the Fed, given how quickly they have got to change their tune,” said Walter Todd, chief investment officer at Greenwood Capital Associates in Greenwood, South Carolina.
The Dow Jones Industrial Average .DJI fell 558.72 points, or 2.24 percent, to 24,388.95, the S&P 500 .SPX lost 62.87 points, or 2.33 percent, to 2,633.08 and the Nasdaq Composite .IXIC dropped 219.01 points, or 3.05 percent, to 6,969.25.
Technology shares tumbled, with the S&P 500 tech sector down 3.5 percent. Healthcare shares .SPXHC, the biggest gainer among major S&P sectors this year, dropped 2.5 percent.