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(Reuters) – The blue-chip Dow slipped 1% on Tuesday, as investors dumped economy-linked value stocks and moved into growth-focused sectors, while a regulatory crackdown by Beijing hammered shares of several U.S.-listed Chinese firms.

FILE PHOTO: A security camera is seen next to signage outside of the New York Stock Exchange (NYSE) in New York City, New York, U.S., June 28, 2021. REUTERS/Andrew Kelly

The tech-heavy Nasdaq and the benchmark S&P 500 also turned negative, easing from their intraday record highs on support from mega-cap technology companies such as Microsoft Corp, Apple Inc, Amazon.com Inc and Alphabet Inc.

Eight of the 11 major S&P 500 sectors were trading lower, with energy, financials, industrials and materials facing the brunt of selling. Technology and consumer discretionary gained.

Rate-sensitive banks fell 2.9% as the 10-year U.S. Treasury yield hit its lowest level since Feb. 24. [US/]

Data, meanwhile, showed U.S. services industry activity grew at a moderate pace in June, likely restrained by labor and raw material shortages.

Investors waited for clues from the U.S. Federal Reserve’s policy minutes on when quantitative easing might be tapered. It will be released on Wednesday.

“What you’re seeing is interest in the technology space which is maybe a reflection of the U.S. economy still growing but not as fast as it was, and some concerns about the Fed, possibly tapering down the road,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.

Markets’ moves have been dictated by positive economic data in the past few sessions, with investors fearing that a faster recovery could lead to a rapid rise in inflation and force the Fed to pare back its support.

The S&P 500 growth index also hit a record high on Tuesday, while the S&P 500 value index fell 1.5%. The CBOE Volatility index rose 2.3 points, its highest in two weeks.

Didi Global Inc shares slumped 20.4% after Chinese regulators ordered over the weekend the company’s app be taken down days after its $4.4 billion listing on the New York Stock Exchange.

Other U.S.-listed Chinese e-commerce firms, including Alibaba Group, Baidu Inc and JD.com, fell between 3.5% and 4.6% with the Chinese crackdown also weighing on global markets.

“Investors need to be looking at not just valuations of the company based on global opportunities, but keeping in the back of their mind that policies could go into effect and how will that affect companies here in the (United States),” said Matthew Keator, managing partner in the Keator Group in Lenox, Massachusetts.

Graphic: Nasdaq record vs yields –

At 12:31 p.m. ET, the Dow Jones Industrial Average was down 383.54 points, or 1.10%, at 34,402.81, the S&P 500 was down 35.69 points, or 0.82%, at 4,316.65, and the Nasdaq Composite was down 87.80 points, or 0.60%, at 14,551.52.

The second-quarter earnings season is set to begin next week with big banks, while investors also watched for progress on President Joe Biden’s infrastructure bill.

Declining issues outnumbered advancers for a 3.01-to-1 ratio on the NYSE and for a 3.14-to-1 ratio on the Nasdaq.

The S&P index recorded 45 new 52-week highs and no new low, while the Nasdaq recorded 62 new highs and 67 new lows.

Reporting by Devik Jain and Shreyashi Sanyal in Bengaluru; Additional reporting by Stephen Culp in New York; Editing by Arun Koyyur and Maju Samuel