European stocks slumped on Monday, reacting to increased U.S.-China trade tensions and a downbeat U.S. technology outlook after a three-day hiatus.

The action came as the United States threatened to put tariffs on China or take other measures in response to the outbreak of coronavirus.

State Secretary Mike Pompeo said on Sunday that there was "Enormous evidence" that the virus originated from a laboratory rather than being transmitted from animals.

Data released on Monday showed how economic damage to the coronavirus lockdowns has been.

In April, the Italian manufacturing purchasing managers index fell to a record low of 31.1 and Spain's manufacturing PMI fell to 30.8, on scales where any reading below 50 indicates deteriorating conditions.

According to an estimate compiled by the European Central Bank, professional forecasters expect a 5.5% decline in gross domestic product in the eurozone this year followed by a 4.3% recovery in 2021.

Telefónica TEF, +2.84% of shares rose 3% after it was said to be in talks with Liberty Global LBTYA, +1.12% to merge its UK.

Arms Telecoms, O2 U.K.

And this is Virgin Media.

Lonza LONN, +3.22%, grew 3% as the Swiss chemicals and biotech company said it would produce Moderna's coronavirus mRNA-1273 vaccine.

Futures on the Dow Jones Industrial Average YM00, +1.07% dropped 304 points, with Berkshire Hathaway Chairman and Chief Executive Warren Buffett showing caution weighing on sentiment.

Read the original article "After a three-day break, European stocks skid over U.S.-China tensions" at https://www.marketwatch.com/story/european-stocks-skid-after-three-day-break-on-worries-over-us-china-tensions-2020-05-04