ASML had already been unable to ship its most advanced tools to China, but the report said Washington would also restrict the sale of slightly older machines.
ASML's U.S. shares sank 7.2% in the wake of the report.
Other chip gear makers also lost ground, with Lam Research off 3.6% and Applied Materials losing 2.4%.
A spokesperson for ASML said the company was unaware of any policy change.
(Reporting by Toby Sterling; Editing by Bernadette Baum)