A seven-day surge in technology stocks ended Tuesday after President Trump blocked Singapore-based chip maker Broadcom’s effort to buy Qualcomm. Trump said the $117 billion deal could have been detrimental to national security.
The Dow Jones industrial average climbed as much as 197 points in early trading after investors were pleased with a Labor Department report that showed inflation remained in check last month. But the gains soon faded.
Technology stocks were at record highs after a recent rally. While Qualcomm had rejected all of Broadcom’s offers, investors are now wondering if other deals might also be blocked or if companies will hesitate before making bids for overseas competitors.
‘‘I don’t think we’ve started to price in protectionism on a broader level,’’ said Gina Martin Adams, chief equity strategist for Bloomberg Intelligence.
The S&P 500 index lost 0.6 percent, to 2,765.31. The Dow Jones industrial average slid 0.7 percent, to 25,007.03. The Nasdaq fell 1 percent, to 7,511.01, its first decline after seven straight gains. The Russell 2000 index of smaller-company stocks slipped 0.6 percent, to 1,592.05.
Qualcomm is one of the biggest makers of processors that power smartphones and other mobile devices. The deal would have been the largest in the history of the technology industry, and Broadcom’s offer came as other countries are also getting ready to build faster ‘‘5G’’ wireless networks.
Trump’s decision followed a recommendation from the Committee for Foreign Investment in the US, which said Broadcom might cut back on research and development spending.
Qualcomm slid 5 percent, to $59.07. Broadcom rose more than 3 percent early on but finished with a loss of 0.6 percent at $261.22. The Wall Street Journal reported Friday that Intel wanted to stop the deal and might try to buy Broadcom to make that happen. Intel rose 0.5 percent.
Trump also cited national security risks this month in announcing tariffs on imported aluminum and steel, and investors appeared to be wondering if at least one other deal will face new obstacles. In November, Bermuda-based chip maker Marvell Technology Group agreed to buy competitor Cavium for $6 billion. Cavium stock lost 4.4 percent, while Marvell lost 5.9 percent.
The US government has blocked deals by Chinese companies in the last few years under both Barack Obama and Trump, but Adams, of Bloomberg Intelligence, said investors are more focused on the issue now.
‘‘We no longer have tax reform dangling in front of us,’’ she said. ‘‘It’s adding to an environment in which the market is a bit more nervous.’’
The government said prices paid by consumers rose 0.2 percent in February, matching estimates. Excluding food and energy costs, prices have risen 1.8 percent in the last year. Prices had jumped in January. Over the last month investors have worried about the prospect of faster inflation, but Tuesday’s price report and the monthly jobs report on Friday suggest inflation isn’t moving any more rapidly than it did in the recent past.
‘‘If you put the two of them together it paints a very clear picture of an economy that’s operating at a very high level, that’s showing some inflation, but not overheating inflation,’’ said Rick Rieder, BlackRock’s chief investment officer of global fixed income.
Rieder said that in general, service costs are rising and the costs of goods are falling, although clothing prices have bounced back a bit recently.
With investors expecting slower gains in rates, bond yields headed lower. The yield on the 10-year Treasury note slipped to 2.85 percent from 2.87 percent. Faster inflation would likely result in the Fed raising interest rates more quickly. Investors feared that could significantly slow the economy and the market’s gains.
Lower yields mean lower interest rates, and that weighed on bank stocks. Bank of America fell 1.5 percent.
Companies that are considered bond proxies, like utilities and real estate investment trusts, did better than the rest of the market. They often move in the opposite direction of bond yields because investors seeking income buy them for their big dividend payments.