The Nasdaq Composite looked set to confirm a bear market Friday, plunging more than 20% from its record high in December, as an escalating tariff war between the U.S. and China sent shockwaves through global markets and threatened to derail the AI-driven tech boom.
The tech-heavy index, which hit a record close of 20,173.89 on December 16, was last down 3.6% Friday following China’s announcement of 34% tariffs on U.S. imports. The move was a retaliatory strike against sweeping levies imposed by President Donald Trump earlier in the week. The Nasdaq’s decline now marks its worst stretch since the Covid era.
“The tech sector is staring down the barrel of a recession,” said Wedbush analyst Dan Ives. “If these tariffs stand, we’re looking at a 15% hit to tech earnings and a supply chain nightmare rivaling 2020.”
The pain extended across Wall Street. The Dow Jones Industrial Average was on track to confirm a correction—down 10% from its high—while the S&P 500 has slumped 15.3% from its record.
The market’s most influential tech names—Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia, and Tesla—are taking the hardest hits. An ETF tracking these so-called “Magnificent Seven” has cratered 27.6% since December.
Apple, with its vast manufacturing base in China, has fallen 12% since Wednesday, facing the brunt of a 54% combined tariff rate. Meta and Tesla are down 12.4% and 13.1%, respectively, while Nvidia, the face of the AI revolution, has slid 13.6% amid worries of a slowdown in data center investment.
“Big tech is now in a triple bind—regulatory scrutiny, supply chain disruption, and global economic uncertainty,” said Michael Ashley Schulman of Running Point Capital. “A 34% tariff from China forces companies to rework pricing, margins, and even where they make their products.”
Tesla also faces growing public backlash in Europe over Elon Musk’s increasing political involvement as a senior advisor in Trump’s administration. Meanwhile, PC makers and server suppliers have been hammered by soaring electronics tariffs. Dell and HP are down 22.3% and 19.1% this week, while Hewlett Packard Enterprise has lost nearly 22%.
Ives called the tariffs a “bad science experiment,” warning they could crush the AI revolution and cause an “economic Armageddon.”
As the world’s two largest economies dig in for a prolonged trade fight, investors are bracing for more volatility—and an uncertain future for the tech sector that has powered markets for the past decade.
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