Stocks taken for a ride lower with Harley

The high-stakes game of trade brinkmanship is continuing to take a toll on the stock market, as an iconic American motorcycle maker said it will start making some bikes overseas.

The Dow Jones Industrial Average fell 328 points, or 1.3 percent, to 24,253 on Monday; the S&P 500 lost 37.8 points, or 1.4 percent, to 2,717; and the Nasdaq Composite dropped 161 points, or 2.1 percent, to 7,532.

The US Treasury Department said early Monday that it may block firms with at least 25 percent Chinese ownership from buying US tech firms.

Treasury Secretary Steven Mnuchin later said on Twitter that restrictions would apply, not specifically to China, but "to all countries that are trying to steal our technology".

Markets appeared to like that even less, as the Dow, down in nine of the last 10 sessions, lost almost 500 points after the comments.

"There's no plans to impose investment restrictions on any countries that are interfering in any way with our country. This is not the plan," White House trade adviser Peter Navarro said on CNBC Monday. "The whole idea that we're putting investment restrictions on the world — please discount that."

Navarro said that a Treasury Department report later this week on US restrictions on foreign investment won't be as sweeping as anticipated.

The S&P Technology Index fell 2.3 percent, its biggest one-day fall in more than two months. The Philadelphia Semiconductor Index lost 3.1 percent as shares of chipmakers, which get much of their revenue from China, were pounded. The CBOE Volatility index, considered a thermometer of market fear, rose to its highest level in nearly a month.

Chipmaker Micron Technology, which gets half its revenue from China, lost 6.9 percent to $53.16, and Advanced Micro Devices fell 4.4 percent to $15.11. Nvidia sank 4.7 percent to $239.12.

"I think a possible cold war over IP (intellectual property) is magnitudes more dangerous for the markets than tariffs on things like soybeans or cars," Jim Collins, founding partner of The Portfolio Guru, told China Daily.

"The long-term valuations of the FANG (Facebook, Amazon, Netflix and Google) stocks have to reflect that somehow, someday, they'll be available in China, with its growing middle-class and about 20 percent of the world's population. If not, then they are simply overvalued, a la the tech bubble of 2000. If the latter is true, that is scary for a US stock investor," Collins wrote in a piece for Forbes earlier Monday.

On Monday, Facebook was down 2.7 percent, Amazon off 3.1 percent, Netflix 6.5 percent lower and Google parent Alphabet off 2.6 percent. Of the four, only Amazon has an operation in China.

Milwaukee-based Harley-Davidson said it would move production of motorcycles that it currently ships to the European Union to its international facilities. It forecast that EU tariffs would cost the company $90 million to $100 million a year. Harley shares fell 6 percent.

Harley's announcement raised concern that escalating trade threats could lead to similar moves from other companies and dull US economic growth.

"With the anecdotal evidence around Harley-Davidson, the concern is that what had been an escalation of rhetoric (on trade) is leading to real-world consequences," said Brian Nick, chief investment strategist at Nuveen in New York.

US President Donald Trump has threatened to put tariffs on hundreds of billions of dollars in Chinese imports over complaints Beijing steals or pressures foreign companies to hand over technology. He's also pressuring China to buy more US-made goods.

China is gaining in biotechnology, electric vehicles and other industries, and reports have said the administration wants to slow Beijing's progress in those areas.Taxes by the US on tens of billions of dollars in imports from China, and retaliatory taxes by China on US goods, are set to go into effect in less than two weeks.

"Every day you get closer to those particular dates, it gets more worrisome," said Randy Frederick, vice-president of trading and derivatives for Charles Schwab.

Germany's DAX fell 2.5 percent and London's FTSE 100 gave up 2.2 percent. France's CAC 40 shed 1.9 percent. Hong Kong's Hang Seng lost 1.3 percent. Tokyo's Nikkei 225 shed 0.8 percent and in South Korea the Kospi was little changed.

Reuters and The Associated Press contributed to this story.