Shares skidded Thursday in Asia after moderate declines on Wall Street as anxious mounted over the possibility the U.S. and China may not reach a trade deal before next year.

Hong Kong led the region with its benchmark Hang Seng index

HSI, -1.52%

  falling 1.6%. The Shanghai Composite index

SHCOMP, -0.30%

  lost 0.4%, while Japan’s Nikkei 225

NIK, -0.48%

  gave up 0.8%.

A published report suggested a preliminary “Phase 1” trade pact may not be completed this year as negotiators continue to wrestle over differences. The report by Reuters cited an unnamed Trump administration official as saying it was possible a deal might not be reached, but more likely that it would.

The comments spooked investors already twitchy over the possible blow to the talks from U.S. Congressional resolutions expressing support for human rights in Hong Kong, where political protests have dragged on for months.

China condemned moves by U.S. lawmakers to throw their support behind the protesters in Hong Kong, threatening “strong countermeasures.”

“Asia has been nervous about the state of trade play all week with equities ex-China underperforming. The early price action this morning suggests that the cautious walk to the exit may be turning into an unruly every man for himself,” Jeffrey Halley of Oanda said in a commentary.

Investors have been hoping the world’s two biggest economies can make a deal before new and more damaging tariffs take effect Dec. 15 on about $160 billion in Chinese imports. Those duties would cover smartphones, laptops and other consumer goods.

Beijing wants Washington to first agree to broader tariff rollbacks on Chinese goods.

“If a deal is not going to get done before the end of the year, then all of a sudden this uncertainty comes back in around what’s going to happen around December 15,” said Scott Ladner, chief investment officer at Horizon Investments. “Are the tariffs back on the table again? The market has certainly come to expect that those are not going to happen.”

In other Asian trading, South Korea’s Kospi

180721, -1.35%

  dropped 1.3%, Australia’s S&P ASX 200

XJO, -0.74%

  lost 0.7% and benchmark indexes in Taiwan

Y9999, -0.63%

  and Singapore

STI, -0.86%

  fell.

Among individual stocks, chip maker Tokyo Electron

8035, -3.44%

  sank in Tokyo trading, as did Screen Holdings

7735, -4.44%

  and SoftBank

9984, -1.61%

 . In Hong Kong, Wharf Real Estate

1997, -3.16%

 , Sunny Optical

2382, -3.87%

  and AIA Group

1299, -1.48%

  fell. Samsung

005930, -1.92%

  and SK Hynix

000660, -2.18%

  declined in South Korea, while Beach Energy

BPT, -1.72%

  and Westpac

WBC, -1.99%

  retreated in Australia.

On Wall Street overnight, technology stocks took the heaviest losses, along with communication services and industrial stocks. Energy stocks notched big gains as crude oil prices rebounded.

The selling nudged the major U.S. stock indexes off their recent all-time highs.

The S&P 500 index

SPX, -0.38%

  dropped 0.4% to 3,108.46. The Dow Jones Industrial Average

DJIA, -0.40%

  lost 0.4% to 27,821.09, while the Nasdaq

COMP, -0.51%

  slid 0.5% to 8,526.73.

Growing optimism among investors that the U.S. and China were making progress toward a limited trade deal helped pave the way for gains in the market in recent weeks, including a string of all-time highs for the major stock indexes.

That optimism dimmed Wednesday as investors weighed the implications of more tariffs kicking in next month.

The two countries have raised tariffs on billions of dollars of each other’s goods in the fight over China’s trade surplus and technology ambitions. That weighs on trade worldwide and threatens to depress corporate earnings and global economic growth, which has already showed signs of slowing.

Benchmark crude oil

CLZ19, +3.08%

  shed 11 cents to $56.90 per barrel in electronic trading on the New York Mercantile Exchange. It rose $1.66 on Wednesday to settle at $57.01 a barrel. Brent crude oil

CLF20, -0.11%

 , the international standard, gave up 15 cents to $62.25.

The dollar

USDJPY, -0.01%

  slipped to 108.52 Japanese yen from 108.59 yen on Wednesday.

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