The major U.S. index futures are currently pointing to a sharply lower open on Wednesday, with stocks likely to give back ground after trending higher over the past few sessions.

Tech stocks may lead an early pullback on Wall Street after a report from Bloomberg said President Joe Biden’s administration is considering tougher trade rules against companies in its chip crackdown on China.

Bloomberg said the administration has told allies that it’s considering using the most severe trade restrictions available if companies continue giving China access to advanced semiconductor technology.

Citing people familiar with recent discussions, Bloomberg said the U.S. is mulling whether to impose a measure called the foreign direct product rule, which lets the country impose controls on foreign-made products that use even the tiniest amount of American technology.

The downward momentum on Wall Street also comes after former President Donald Trump suggested Taiwan should pay the U.S. for defense, claiming the country took “about 100%” of America’s chip business.

Extending the upward move seen over the two preceding sessions, stocks moved mostly higher during trading on Tuesday. The Dow led the charge, surging to a new record closing high.

The Dow jumped 742.76 points or 1.9 percent to 40,954.48, the S&P 500 climbed 35.98 points or 0.6 percent to a new record closing high of 5,667.20 and the Nasdaq rose 36.77 points or 0.2 percent to 18,509.34.

The strength on Wall Street partly reflected a positive reaction to some of the latest earnings news, with Dow component UnitedHealth (NYSE:UNH) moving sharply higher after reporting second quarter earnings that exceeded analyst estimates.

Bank of America (NYSE:BAC) also moved notably higher after the financial giant reported better than expected second quarter earnings.

Shares of Morgan Stanley (NYSE:MS) also turned positive after seeing initial weakness after the company reported better than expected second quarter earnings.

Traders also reacted positively to the latest U.S. economic news, including a Commerce Department report showing U.S. retail sales came in unchanged in the month of June.

The Commerce Department said retail sales came in flat in June after rising by an upwardly revised 0.3 percent in May.

Economists had expected retail sales to come in unchanged compared to the 0.1 percent uptick originally reported for the previous month.

Excluding a sharp drop in sales by motor vehicle and parts dealers, retail sales climbed by 0.4 percent in June after inching up by 0.1 percent in May. Ex-auto sales were expected to creep up by 0.1 percent.

“Judging by the positive market reaction to the US retail sales data, it appears that investors are focusing on the economic strength for now, while also maintaining a strong belief that monetary policy starts to ease after the summer,” said Dan Coatsworth, investment analyst at AJ Bell.

The Labor Department also released a report showing import prices in the U.S. were unexpectedly flat in the month of June.

The report said import prices were unchanged in June after dipping by a revised 0.2 percent in May. Economists had expected import prices to rise by 0.2 percent compared to the 0.4 percent decrease originally reported for the previous month.

Meanwhile, the Labor Department said export prices declined by 0.5 percent in June after falling by a revised 0.7 percent in May.

Export prices were expected to edge down by 0.1 percent compared to the 0.6 percent decrease originally reported for the previous month.

Housing stocks showed a substantial move to the upside on the day, with the Philadelphia Housing Sector Index spiking by 5.3 percent to a record closing high.

Optimism about the outlook for interest rates contributed to the strength in the sector despite a report from the National Association of Home Builders showing an unexpected dip in homebuilder confidence in the month of July.

Gold stocks are also saw significant strength amid a sharp increase by the price of the precious metal, driving the NYSE Arca Gold Bugs Index up by 3.4 percent. The index reached a more than two-year closing high.

Considerable strength was also visible among airline stocks, as reflected by the 3.3 percent surge by the NYSE Arca Airline Index. Banking, biotechnology and telecom stocks also saw notable strength on the day, moving higher along with most of the other major sectors.

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