Getty Images / Drew Angerer

China's trade-war retaliation sent the tech-heavy Nasdaq Composite index sliding more than 3% on Monday.

US tech firms like Apple and microchip manufacturers with high exposure to the Chinese market were among those hit the hardest.

The losses came after China allowed the yuan to fall past a key level against the US dollar, something President Donald Trump called a "major violation."

The move is seen as worsening the already fraught trade relationship between the US and China — one that stock investors have been watching closely in recent months.

Visit the Markets Insider homepage for more stories.

China fired back after President Donald Trump escalated the trade war by announcing new tariffs, sending US stocks tumbling toward their worst day of 2019.

Here's a look at the major US indexes as of the 4 p.m. close:

And the major European indexes:

The FTSE 100 fell 2.47% to 7,223.85.

The Euro Stoxx 50 declined 1.80% to 3,315.30.

The tech-heavy Nasdaq Composite index took the biggest hit after China's central bank allowed its currency, the yuan, to fall below a crucial threshold versus the US dollar. Most adversely affected were tech firms with high exposure to China, making the sector the worst-performing in the S&P 500.

Trump described China's devaluation move as a "major violation" and called it economic retaliation against the US. It was just the latest flare-up in a months-long battle for trade supremacy — one for which a weak currency is preferred.

The spread between three-month and 10-year Treasury yields, referred to as the yield curve, on Monday inverted to its largest gap since 2007. At its widest, the spread hit -32 basis points, adding to a growing list of recession indicators. An inversion of the curve has preceded every recession for the past 50 years.

Markets Insider is looking for a panel of millennial investors. If you're active in the markets, CLICK HERE to sign up.

Within the S&P 500, these were the largest gainers:

And the largest decliners:

Shares of Apple were down as much as 5.6% because of the iPhone maker's particular vulnerability to the Chinese market. China has become an increasingly important driver for hardware sales, and Apple relies on it for manufacturing as well. The company did more than $9 billion in net sales in China during the second quarter of 2019, a 4% drop from the same period last year.

Chipmakers are also taking a beating. The iShares PHLX Semiconductor ETF, which tracks a basket of companies that design, manufacture, and sell microchips, fell by more than 5%. Chipmakers have been forced to grapple with shrinking demand and a resulting supply glut due to the rising trade tensions and the US's Huawei ban.

Here are some of the major chip stocks falling on China's retaliation:

Alphabet, Google's parent company, was down more than 4% at its lows. Google's Android is the most popular mobile operating system in China, and the company also sells hardware products and its cloud services in the country. The company has also been criticized in the past for some of its projects in China.

Every sector of the S&P 500 declined on Monday, with technology, financial, and communications stocks leading the losses.

The Nasdaq Composite is down more than 7% from its all-time high, reached in late July, but still up roughly 16% year-to-date.

Markets Insider

NOW WATCH: Most hurricanes that hit the US come from the same exact spot in the world