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US tech stocks fell sharply on Wednesday, in a fresh jolt of volatility for Wall Street as uncertainty over Donald Trump’s trade tariffs and the health of the world’s biggest economy weighed on investor sentiment.

The Nasdaq Composite was down 1.6 per cent by lunchtime trading in New York, setting the stage for the technology-heavy index to snap three consecutive days of gains. Chipmaker Nvidia and Elon Musk’s electric-car company Tesla were among the biggest fallers, losing 5.2 per cent and 5.7 per cent respectively.

Wall Street’s broader S&P 500 gauge was down 0.8 per cent by lunchtime.

Wednesday’s pullback in tech stocks amounted to a “reality check” for markets following gains earlier in the week, as concerns over President Donald Trump’s tariffs and weakening consumer sentiment persist, said Peter Tchir, head of macro strategy at brokerage Academy Securities.

“People got too comfortable Monday, but they’re realising that we’re still in a very tricky environment,” Tchir said, referring to the Nasdaq’s 2.3 per cent rally at the start of this week.

Trump is set to reveal a new tariff regime next Wednesday in an event he has dubbed “Liberation Day”. This could include hefty new levies on major US trading partners including Mexico and Canada after the president previously imposed a 25 per cent duty on global imports of steel and aluminium.

Orders for long-lasting US goods rose 0.9 per cent in February from the previous month, the commerce department said on Wednesday, far outpacing expectations in a FactSet poll for a 1 per cent drop. However, economists at investment bank Barclays noted that the rise was fuelled by increases in orders for vehicle parts “amid anticipation of tariff​-​related disruptions”.

Barclays economists also noted orders for high-cost “capital goods” fell, “hinting that a drag on fixed investment from policy uncertainty could be taking shape”.

Consumer optimism has also shown signs of darkening in recent weeks, with data from the Conference Board on Tuesday showing Americans’ outlook about the future sinking to the lowest level in 12 years.

Investors and economists are increasingly raising the alarm about the possibility of a growth slowdown in the US just as Trump’s escalating global trade war pushes prices higher.

Federal Reserve policymakers last week slashed their growth forecasts for the US economy, while raising their inflation outlook. The Bureau of Economic Analysis is set to release a fresh report on inflation on Friday.