wall Street stocks tumbled Tuesday as heightening tensions between Beijing and Washington dimmed hopes for much-anticipated trade talks later in the week.
US markets were in the red the entire session after the Commerce Department late Monday announced new restrictions on 28 Chinese entities over human rights violations, drawing an angry rebuttal from China.
Stocks took another leg lower during the afternoon after the US State Department announced new visa restrictions Chinese government and Communist Party officials alleged to have persecuted Muslims in China.
The moves come ahead of major high-level trade talks between the United States and China that are set to begin on Thursday.
The Dow Jones Industrial Average ended at 26,164.04, down 1.2 percent.
The broad-based S&P 500 slumped 1.6 percent, closing at 2,893.06, while the tech-rich Nasdaq Composite Index tumbled 1.7 percent to 7,823.78.
Besides the new US sanctions, there were also fresh reports citing unnamed Trump administration officials that the White House is mulling new measures to curtail US investment in China.
"It's not a good sign to see these type of measures being put in place just before the trade negotiation resumes," said Tom Cahill of Ventura Wealth Management.
"The market is skeptical that anything good can come out of the negotiations this week."
Meanwhile, Federal Reserve Chairman Jerome Powell offered a fairly upbeat appraisal of the US economy, saying policymakers still "continue to see a sustained expansion" and that the outlook on jobs and inflation are "favorable."
Powell's remarks suggest the case for further cuts to the Fed's benchmark lending rates could be weakening, with employment data now showing the US jobless rate fell to its lowest level in 50 years in September.
However, futures markets overwhelmingly continue to expect the Fed to cut interest rates later this month.