Riot police wearing face mask stand guard in front of a bank electronic board showing the Hong Kong share index at Hong Kong…
Riot police wearing face masks stand guard in front of a bank electronic board showing the Hong Kong share index at Hong Kong Stock Exchange, May 28, 2020.

Stocks on Wall Street closed down Thursday, ending a three-day winning streak, with investors bracing for possible trade sanctions against China over its tough new Hong Kong security law.

The Dow Jones industrial average was 147.63 points lower. The S&P 500 fell 6.40 points, and the Nasdaq Composite Index was also down 43.37 points. All three were down less than 1%.

The Chinese parliament rubber-stamped the new security measures for Hong Kong on Thursday.

The Trump administration immediately declared that Hong Kong was no longer autonomous, now that it is virtually under Chinese control.

The U.S. is one of Hong Kong's leading trading partners and a large source of direct investment. Analysts say the U.S. decision could have a devastating effect on a thriving Asian financial hub.

European markets showed no sign of the Hong Kong controversy. Major indexes in London and Frankfurt were up 1%, and Paris was about 1.75% higher.

Asian markets also had a good day. Tokyo's Nikkei index closed 2.32% higher, while Sydney's S&P/ASX index posted a 1% gain. Shanghai was up a fraction, while Hong Kong was down a fraction.