Semiconductor stocks listed on Wall Street lost nearly $500 billion of their market value on Wednesday amid fears of escalating trade tensions with China and Taiwan that could disrupt the sector.

Nvidia’s shares fell almost 7 per cent, losing more than $200 billion in market capitalisation. The technology-heavy Nasdaq Composite index closed down 2.8 per cent, or 512.42 points, in New York while the S&P 500 dropped 1.4 per cent, or 78.93 points, to 5,588.27. In contrast, the Dow Jones industrial average closed at its third consecutive record and 22nd of the year so far.

Investors took fright at remarks by Republican presidential nominee Donald Trump, who suggested in an interview with Bloomberg that he would not pay for the US to defend Taiwan