Think the highest-flying tech stocks are immune to trade tensions? As Monday’s market action suggests, it might be time to think again.

In a well-timed Monday note, Ingvild Borgen Gjerde, an economist at Capital Economics, warned clients that while the so-called FAANG stocks — an acronym referring to Facebook Inc. FB, +0.40% , Apple Inc. AAPL, +1.92% , Amazon.com Inc. AMZN, +1.39% , Netflix Inc. NFLX, +0.62% and Google parent Alphabet Inc. GOOG, +1.14% — are, on average, less directly affected by rising trade restrictions than U.S. tech firms in general, they are highly cyclical and exposed to a slowdown in growth.

Capital Economics was already looking for growth to slow next year, and Gjerde warned that escalating trade tensions could accelerate the process.

Read:Why a major trade war could mean a ‘full-blown recession’

Tech stocks were certainly feeling the pinch on Monday, with the Nasdaq Composite COMP, +0.82% dropping more than 2% to lead a Wall Street selloff that left the Dow industrials DJIA, +0.38% off nearly 500 points at its low. The Dow ended nearly 330 points lower for a decline of 1.3%, while the S&P 500 SPX, +0.51% sank 1.4%.

See:Highflying tech stocks hammered by China fears

The tech-led weakness comes as the Trump administration considers efforts to block Chinese investment in the U.S. as well as curbs on technology exports to Beijing. That comes on top of the Trump administration’s threats to impose tariffs on imports of as much as $450 billion in Chinese goods; Beijing has threatened to retaliate.

While fears of a global trade war have weighed on the broader benchmarks, the tech-heavy Nasdaq chugged to a string of record highs, notching its latest record close just last week. As of midday Monday, the Nasdaq was up 9% year-to-date versus a 1.5% rise for the S&P 500.

That outperformance might seem surprising since the U.S. information technology sector is more exposed to China than any other, both through tightly integrated value chains and direct sales exposure, Gjerde said.

The immunity, at least until now, has really been down to the aforementioned FAANGs, which have been the primary driver of the tech sector’s strong performance, Gjerde said (see chart below).

Capital Economics

After all, with the exception of Apple, they have less exposure to China than other IT firms. That’s because the FAANGs are mainly focused on software services, which means their value chains are less integrated with China than hardware producers, which typically have factories in China. Second, most of the FAANGs have little sales exposure to China, as they all face competition from large Chinese rivals that provide the same services and control most of the domestic market, the economist said.

As investors might be getting a taste of on Monday, a significant escalation in trade tensions could leave the FAANGs vulnerable, Gjerde said. Moreover, she rejected the argument that FAANGs are “internet staples,” so essential that demand is insulated from fluctuations in the economy.

“On the contrary, we think that the FAANGs’ revenue growth remains highly dependent on overall growth in the economy, and that once this falls, the FAANGs’ profit growth will fall as well,” she said, warning that if trade tensions escalate much further, “the risk increases that this could happen sooner rather than later.”