In a significant downturn for the technology sector, shares of industry giants Amazon, Nvidia, and Tesla each dropped approximately 5% on Friday, resulting in a combined market cap loss of $770 billion. This bearish trend was largely attributed to renewed tensions following President Donald Trump’s announcement of potential tariff increases on Chinese imports.
The major declines plunged the Nasdaq index down 3.6% and the S&P 500 by 2.7%, marking the worst performance for these indices since April 2025. The sell-off commenced just as tech stocks had been experiencing a robust rally, buoyed by substantial investments in artificial intelligence infrastructure. Nvidia, which recently became the first company to achieve a staggering market cap of $4.5 trillion thanks to its dominance in graphics processing units used for AI model training, saw its market value decline by nearly $229 billion in one day.
In a post made after market hours, Trump stated that the U.S. plans to impose a 100% tariff on Chinese goods starting November 1, alongside new export controls on critical software. The immediate aftermath of this announcement saw stocks of Amazon, Nvidia, and Tesla dip an additional 2% in extended trading.
The impact of these tariff threats is particularly concerning given the increasing reliance of major tech firms on global supply chains and international markets. OpenAI, a key player in this space, continues to report rising demand for its services, having recently introduced its Sora 2 video creation app and noting that its ChatGPT assistant now garners over 800 million weekly users. Despite the potential fallout from tariffs, OpenAI uses Nvidia’s GPUs supplied through various cloud providers, including Microsoft.
However, Microsoft’s market cap also reflected the broader market fears, suffering a drop of $85 billion on Friday. The tech giant is engaged in fierce competition with Amazon to provide GPU rental services through its cloud data centers and is also poised for upcoming earnings announcements that could further impact its stock price.
Amazon’s stock has now fallen 2% for the year, erasing previous gains, with its valuation dropping by $121 billion within a single day. CEO Andy Jassy previously expressed concerns regarding the misreporting of the tariff situation, highlighting the uncertainty surrounding its potential impact on retail prices and consumption.
Tesla, fresh off an announcement about launching lower-priced vehicles, also felt the strain with its market capitalization plummeting by $71 billion. The automaker’s third-quarter results are anticipated on October 22.
Other tech players like Google’s parent company, Alphabet, and Meta, the owner of Facebook, also saw declines of 2% and nearly 4%, respectively, amid the broader market sell-off. As the tech sector grapples with these disruptions, investors are left watching closely for further developments, especially in light of the upcoming earnings reports from major companies.
