(Bloomberg) -- Stocks sellers weren’t showing much discretion Thursday as the major indexes tumbled. But the outsize chipmaker rout may have had its origin in an overnight shift from China.

The Philadelphia Semiconductor Index fell as much as 6.2% Thursday, its worst session since mid-June, following news that China is planning a sweeping set of new government policies to develop its domestic semiconductor industry and counter recent Trump administration restrictions. The decline has shaved off about $100 billion in value for the gauge.

Major chipmakers were on pace to see one of their worst days in months. Shares of Nvidia Corp. were down as much as 10% in New York, the most since March 18. Qualcomm Inc. and Broadcom Inc. each fell more than 5%, while Intel Corp. declined more than 3%.

“If you were to ask me right now what my biggest fear had been for most of the month of August, it was the growing tensions between the U.S. and China,” said Arthur Hogan, chief market strategist at National Securities Corp. “It’s not around the alleged phase-one trade talks and China buying more of our agricultural products, but it’s much more around what we’re actually doing in real life -- we’re starting a technologic cold war.”

Semiconductors are key to Beijing’s technology objectives. So the government is preparing broad support to develop so-called third-generation semiconductors for the five years through 2025, Bloomberg News reported. The move comes as the Trump administration threatens to cut off China’s supplies from abroad.

The U.S. government has blacklisted dozens of China’s tech firms to prevent them from buying American parts. It has also instituted bans on ByteDance Ltd.’s TikTok and Tencent Holdings Ltd.’s WeChat and has sanctioned Huawei Technologies Co.

Following these restrictions, China’s reaction is no surprise, Hogan said.

When the two largest economies in the world go head-to-head, he said, “it’s hard to rationalize what good comes from this.”

©2020 Bloomberg L.P.