(Reuters) – Wall Street’s main indexes fell more than 2% on Monday after Beijing announced plans to retaliate with higher tariffs on U.S. goods, raising fears that another round of tit-for-tat measures could push the U.S. economy toward recession.

At the center of the selloff were shares of technology companies including chipmakers, manufacturing giants and retailers that are exposed to China.

The “FAANG” group of stocks – Facebook Inc, Amazon.com Inc, Apple Inc, Netflix Inc and Google parent Alphabet Inc – fell between 1.7% and 5%.

China’s finance ministry said on Monday it planned to impose tariffs ranging from 5% to 25% on 5,140 U.S. products on a target list worth about $60 billion from June 1, striking back after U.S. raised duties last week.

“This just got messier and more expensive to the global economy and until we get break here, markets are going to be under pressure,” said Art Hogan, chief market strategist at National Securities in New York.

“Every increase in tariffs is a drag to the global economy and if it drags the economy down, it will drag earnings down, so stocks are going to react to that.”

The S&P 500 on Friday racked up its worst weekly decline since December, as Washington raised tariffs on Chinese goods worth $200 billion to 25% from 10%.

The tensions reverberated through global financial markets, with the yield curve between three-month U.S. Treasury bills and 10-year notes inverting for the second time in less than a week on Monday. [US/]

An inversion in the yield curve is seen as a classic signal that a recession is coming. It also makes banks’ lending less profitable. The S&P banks index fell 2.7%

U.S. equities hit record highs just two weeks ago on hopes of a trade deal and a positive first-quarter earnings season. The S&P 500 was trading 4.4% below its all-time high close.

As the trade dispute extends, investors expect tariffs to increase corporate costs, lower profit margins and hinder the ability of companies to plan or make capital expenditures. [.N/O]

A Bank of America Merrill report showed new tariffs pose a downside risk to 2019 earnings per share of 1% to 3% for S&P 500 companies in case of no resolution.

Tariff-sensitive Boeing Co declined 2.9% and Caterpillar Inc dipped 4%.

The Philadelphia chip index was down 3.8%, adding to a 6% decline last week. Micron Technology Inc, Intel Corp and Qualcomm Inc fell between 2.6% and 3.3%.

At 9:55 a.m. ET the Dow Jones Industrial Average was down 518.98 points, or 2.00%, at 25,423.39, the S&P 500 was down 61.03 points, or 2.12%, at 2,820.37 and the Nasdaq Composite was down 219.42 points, or 2.77%, at 7,697.52.

Shares of Uber Technologies Inc fell 7.4%, extending losses from Friday’s 7.6% fall in its first day of trading as a public company.

Declining issues outnumbered advancers for a 6.21-to-1 ratio on the NYSE and a 6.71-to-1 ratio on the Nasdaq.

The S&P index recorded six new 52-week highs and 11 new lows, while the Nasdaq recorded seven new highs and 83 new lows.