By Sue Chang and Chris Matthews, MarketWatch

Tesla shares slide after Wedbush analyst cuts price target

U.S. stocks retreated Monday, though off session lows, as souring U.S.-China trade relations continued to weigh on market sentiment with technology shares taking the brunt of the selling pressure.

How are major benchmarks faring?

The Dow Jones Industrial Average fell 49 points, or 0.2%, to 25,720, the S&P 500 index declined 10 points, or 0.4%, to 2,849, while the Nasdaq Composite Index retreated dropped 81 points, or 1%, to 7,734.

Technology, real estate and communications-services sectors were the S&P 500's biggest decliners.

At session lows, the Dow was down 203 points, or 0.8%, the S&P 500 fell 27 points, or 1%, and the Nasdaq had fallen 137 points, or 1.8%.

What's driving the market?

Sino-U.S. trade tensions continued to escalate, with shares of chip makers taking it on the chin as U.S. technology companies have begun to comply with the White House's ban on China's Huawei Technologies Inc.

Bloomberg News reported Sunday that Xilinx (XLNX)(XLNX) and other U.S. chip makers, including Intel Corp. (INTC), Qualcomm Corp. (QCOM) and Broadcom Inc. (AVGO) have frozen the supply of critical software and hardware components to Huawei. The Wall Street Journal reported separately that Alphabet Inc.'s (GOOGL)(GOOGL) Google will cease selling some services for devices made buy Huawei (https://www.wsj.com/articles/google-cuts-off-huawei-from-some-smartphone-services-11558342295?mod=hp_lead_pos1), which relies on Google's Android software to run its smartphones.

Chances of further trade talks between the U.S. and China appeared to take a hit over the weekend, after CNBC reported (https://www.cnbc.com/2019/05/17/us-china-trade-talks-have-stalled-sources.html) that scheduling for the next round of negotiations is "in flux," because neither side appears willing to agree to concessions. The South China Morning Post also cited several China-based analysts who argued that China has little incentive (https://www.scmp.com/news/china/diplomacy/article/3010793/china-no-rush-another-trade-war-talks-trip-us-treasury) to engage in further talks until U.S. negotiators show willingness to compromise.

Which data and Fed speakers are in focus?

The Federal Reserve Bank of Chicago's national activity index plunged to a negative 0.45 in April, down from an upwardly revised positive 0.05 in March and a negative 0.31 in February. A reading less than zero indicates below-trend economic growth.

Atlanta Federal Reserve Bank President Raphael Bostic said Monday morning (http://www.marketwatch.com/story/atlanta-feds-bostic-says-hes-not-sure-the-direction-of-the-next-interest-rate-move-2019-05-20) that he wasn't sure whether the central bank would move next to raise or lower interest rates, while saying he expects growth of 2.25% to 2.5% this year, a slowdown from last year's levels.

Fed Chairman Jerome Powell will give a speech at the Atlanta Fed conference at 7 p.m.

What are strategists saying?

"At the margin, the global trade situation is deteriorating, and that increases uncertainty," Willie Delwiche, investment strategist at R.W. Baird told MarketWatch. "These trade concerns are not going away, and so the question is does it have a meaningful impact on consumer and business confidence," he said.

Delwiche also noted that so far measures of confidence remain elevated, but the longer trade uncertainty remains, the likelier the odds that it has lasting impact on markets and the economy.

"Market volatility continues to stem from announcements and interpretations of what is going on in trade disputes between the US and its trading partners, but principally China," said Jasper Lawler, head of research at London Capital Group, in a daily research note.

Which stocks are in focus?

Shares of Sprint Corp. (S) rallied 24% after Federal Communications Chairman Ajit Pai issued a statement Monday endorsing its planned merger with T-Mobile US Inc. (TMUS), after the companies told the commission that they "would take a series of significant steps if the companies' merger application is approved," including committing to build out a new 5G telecom that would cover 90% of rural America within 6 years.

Tesla Inc. (TSLA) shares fell 3.3% after analyst Dan Ives at Wedbush slashed his price target (http://www.marketwatch.com/story/teslas-stock-sinks-toward-multi-year-low-after-wedbush-slashed-price-target-again-2019-05-20), citing "major concerns" about the trajectory of the electric car maker's growth prospects.

Dow component Intel Corp. (INTC) stock was down 1.8% on concerns over U.S.-China trade relations.

Shares of money manager Legg Mason Inc. (LM) gained 1.1% following reports that it is nearing a settlement with Trian Fund Management LP that would give the activist investor 3 to 4 seats on the company's board.

Shares of Blue Apron Holdings Inc. (APRN) sank 12% after the meal-kit preparation company said it is pursing plans for a reverse stock split (http://www.marketwatch.com/story/blue-apron-is-pursuing-plans-for-a-reverse-stock-split-2019-05-20).

Ford Motor Co. (F) shed 0.4% after the auto maker began a round of layoffs Monday that will ultimately result in the elimination of 7,000 salaried positions internationally, or about 10% of its salaries workforce.

How are other markets trading?

Stocks in Asia closed mostly lower, with Hong Kong's Hang Seng Index falling 0.6%, while China's Shanghai Composite Index and Shenzhen Composite index both lost ground. Japan's Nikkei 225 , meanwhile rose 0.2%.

European stocks were under pressure, with the Stoxx Europe 600 down 1.1%.

In commodities markets, the price of oil rose, while gold was edging higher (http://www.marketwatch.com/story/gold-claws-up-from-two-week-lows-as-dollar-stocks-point-lower-2019-05-20) and the U.S. dollar softened against its peers.

--Mark DeCambre contributed to this article

(END) Dow Jones Newswires

May 20, 2019 12:45 ET (16:45 GMT)