After strong rallies on continental exchanges US tech shares tumbled overnight as markets appeared to hone in on a key factor driving White House rhetoric. Reports of a restriction on Chinese investment in “sensitive” technology rattled investors. The Nasdaq slumped 3%, bonds rallied and the US dollar rose. Futures markets suggest it will be a bruising session for Asia Pacific investors.

Protection of US intellectual property could be at the heart of recent trade pronouncements from the US President. Markets are moving away from pricing an all-out trade war but the potential for specific action restricting investment in tech stocks weighed heavily. Whether tech businesses are disrupted by trade barriers or the pool of potential investors is reduced the impact on share prices is the same.  Dumping of Facebook stock in light of data usage concerns added to the bearish tone.

The next globally significant economic releases come tomorrow night with inflation data for Europe and the US. Trading could be light ahead of the reads. Industrial metals are buoyant but falling copper and oil prices suggest all is not well with industrial sentiment. Precious metals will offer little support as they drift lower in response to a stronger US dollar