IT Vendor, Channel Company Stocks Hit In Monday Selloff

Stock markets take the biggest beating of the year amid concerns of the growing trade war with China and its impact on the U.S. economy.

Amid growing fears of an escalating trade war with China, U.S. stock markets posted their worst day this year on Monday – and the stocks of some of the IT industry's biggest vendors and channel companies took some of the biggest hits.

The Dow Jones Industrial Average plummeted 767.27 points – down 2.90 percent – to 25,717. About an hour before the closing bell, the Dow was down as much as 961 points. The tech-heavy Nasdaq, meanwhile, plunged 278.03 points – 3.47 percent – to 7,726.04.

Technology stocks were among the hardest hit Monday including Apple (down 5.23 percent), Microsoft (down 3.43 percent) and Intel (down 3.51 percent).

[Related: Huawei Executive: ‘We Seem To Be Caught In The Middle’ Of U.S.-China Trade War]

Some of the industry's biggest solution providers and distributors were hit equally hard in Monday's selloff. Accenture's stock was down 3.87 percent, DXC Technology's stock fell 4.56 percent, Tech Data Corp.'s stock dropped 4.71 percent and Insight Enterprise's stock plummeted 6.46 percent.

The sell-off was triggered by news early Monday that the Chinese government had devalued its currency, the yuan, to fall below its 7-to-1 ratio to the U.S. Dollar for the first time in a decade. That was widely seen as an effort to soften the blow of tariffs the U.S. has slapped on Chinese manufactured goods, according to CNN Business.

China also announced that it had halted purchases of U.S. agricultural products.

News of China's actions followed statements by President Donald Trump last Thursday that he planned to add new 10-percent tariffs to $300 billion of Chinese products being imported into the U.S. starting Sept. 1. News reports last week suggested that talks between the two countries to resolve trade disputes were far from reaching an agreement.

The U.S. on Monday designated China a currency manipulator and there are worries that Trump could respond by devaluing the U.S. dollar, setting off a currency war that would reduce Americans' spending power, CNN Business said.

Apple is seen as particularly vulnerable to the effects of a trade war because so many of its iPhones and other products are manufactured there. Late last month Trump tweeted that his administration would not grant Apple any relief on tariffs on Mac Pro parts manufactured in China. In a request for the waiver Apple said the tariffs, if left in place, would make Apple less competitive globally and reduce the company's contribution to the U.S. economy.

Morgan Stanley's chief economist said Monday that a global recession will come in about nine months if the trade war further escalates by the U.S. raising tariffs on Chinese-made goods to 25 percent as Trump has threatened, according to CNBC.

Another recession warning sign was the yield curve, the difference between short- and long-term bond yields, which grew wider Monday. Such yield curve inversions have presaged recessions.

Dow futures continued to fall Monday after the close of trading, implying a major drop on Tuesday, CNBC said.