U.S. stocks tanked on Friday as news of stock market regulation from China triggered a selloff in global equity markets, where investors were already on the edge due to fears that Greece may default on its international debt.

Recent gains in European equity markets and high valuations of U.S. stock indexes also made them vulnerable to a pullback, according to some analysts.

China’s securities regulator tightened rules on margin lending while the country’s two stock exchanges said they would make it easier to bet that stocks will fall in price in an effort to temper the country’s soaring stock markets.

“This is apparently weighing heavily on Chinese index futures, which is dragging equities lower across the board. Europe is getting battered now as well,” said Craig Erlam, senior market analyst OANDA. Futures of H-shares, or Chinese stocks listed in Hong Kong, fell 4% in after-hours trading.

The Dow Jones Industrial Average DJIA, -1.29% shed more than 250 points, or 1.4%, to 17,851, and the S&P 500 index SPX, -0.98% lost 22 points, or 1%, to 2,083, while the Nasdaq Composite COMP, -1.35% was down 70 points, or 1.4%, to 4,935.

The slide in the opening moments of Friday trading followed similarly bleak action in stock-index futures before the markets officially opened.

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