By 
Stocks went into a nosedive on Friday as the trade war between the US and China took a new turn. All three major US stock indexes plunged after President Trump tweeted that he’d respond to China’s tariffs by further escalating the conflict. The president also ordered US companies to search for “an alternative to China.”
The DOW fell 623 points on Friday’s close, representing 2.37%. The S&P 500 dropped 75.84%, and the Nasdaq slipped 3%, or 239.62 points. Among the hardest hit were tech companies, as many rely heavily on Chinese manufacturing and resources.
Shares in Apple (NASDAQ: AAPL) fell 4.6% while Intel (NASDAQ: INTC) slid 3.89%. Meanwhile, Nvidia’s (NASDAQ: NVDA) stock fell by 5.27% while Advanced Micro Devices (NASDAQ: AMD) decreased by 7.4%.
However, the three major console makers Sony (NYSE: SNE), Microsoft (NASDAQ: MSFT), and Nintendo (OTCMKTS: NTDOY) faired a little better. Sony experienced a 1.7% decline, but shares were already falling after the company announced earlier this week that it had ended its partnership with Marvel to make Spider-Man movies. Nintendo actually came out ahead, with 0.32% increase by closing bell. Microsoft wasn’t as fortunate, as its shares fell by 3.19% on Friday.
Game publisher Electronic Arts (NASDAQ: EA) saw its shares fall 1.81%. Activision Blizzard declined by 3.57% and Take-Two Interactive (NASDAQ: TTWO) fell 2.70%
The cause of stock market turmoil
Earlier in the week, the major indexes and been swinging back and forth with modest gains and losses after Federal Reserve Chairman Jerome Powell left open the possibility for another interest rate cut in September.
Things rapidly shifted when China announced new tariffs of 5% and 10% on $75 billion of US imports. They are scheduled to go into effect on September 1 and December 15, respectively. China’s government stated that the move was in response to the US’s plans to institute 10% tariffs on $300 billion in Chinese imports, which would happen on the same dates. The Chinese tariffs will mainly impact agricultural products, crude oil, small aircraft and cars along with other goods.
Our Country has lost, stupidly, Trillions of Dollars with China over many years. They have stolen our Intellectual Property at a rate of Hundreds of Billions of Dollars a year, & they want to continue. I won’t let that happen! We don’t need China and, frankly, would be far….
— Donald J. Trump (@realDonaldTrump) August 23, 2019
President Trump responded with a tweet that stated, “Our great American companies are hereby ordered to immediately start looking for an alternative to China.” However, it is currently unclear whether he has the authority to make such a command. It didn’t help that Trump later blasted chairman Powell, comparing him to President Xi Jinping of China and asking who the “bigger enemy” is.
The growing tensions and drama prompted investors to offload high-risk stocks, which include technology and entertainment.
