US blue chips took a tumble on Friday having reversed modest opening gains as investors got spooked by reports of another surprise escalation move by President Trump’s government in the ongoing US/China trade war.

At the close in New York, the Dow Jones Industrial Average was about 70 points, or 0.3% lower at 26,820, albeit off earlier triple-digit falls, while the broader S&P 500 index shed 0.5%, and the tech-laden Nasdaq Composite dropped 1.1%.

READ: Trade war sparks fly as President Trump says US will impose an additional 10% tariff on $300 billion worth of Chinese imports

Media reports suggested that Trump’s administration is considering the possibility of de-listing Chinese companies from US stock exchanges, in what would be a radical escalation of trade tensions between the two countries.

Bloomberg reported that exact mechanisms for how to delist the companies were yet to be worked out and any plan is subject to approval by Trump himself, who has given the green light to the discussion, citing a person close to the talks.

Officials are also examining how the US could put limits on the Chinese companies included in stock indexes managed by US firms, although it was not clear how that would be done, the news agency added.

Roller-coaster ride

Sentiment around the trade war – which has weakened global growth prospects and driven rollercoaster moves in markets – has swung back and forth wildly this week.

On Tuesday, stocks took a battering after President Trump castigated Beijing’s trade practices in a speech at the United Nations.

But only a day later, Trump provided some hope that the nearly 15-month trade stand-off could be nearing an end, telling reporters in New York: “They want to make a deal very badly… It could happen sooner than you think”.

Trade talks between the US and China are expected to resume in October.

Reuters reported that, as of February, there were 156 Chinese companies listed on the Nasdaq and New York Stock Exchanges, according to government data, including at least 11 Chinese state-owned firms

Among them, shares of Baidu (NASDAQ:BIDU), Alibaba Group Holding (NYSE:BABA), and (NASDAQ:JD) fell 4%, 5% and 6%, respectively, in New York trade.

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