The U.S. stock market experienced a sharp sell-off on Friday, October 10, 2025, as the tech sector’s largest companies collectively shed nearly $770 billion in market value.
The tech-heavy Nasdaq Composite plunged 3.6%, marking its worst single-day drop since April, amid escalating trade tensions between the United States and China following President Donald Trump’s announcement of steep new tariffs and export controls.
Catalyst: Renewed U.S.-China Trade War Fears
The market slide was triggered by Trump’s aggressive threat to impose a 100% tariff on Chinese imports, effective November 1, alongside export restrictions on critical U.S.-made software.
This move came as a retaliatory response to China’s newly tightened controls on rare earth mineral exports, materials essential for high-tech manufacturing, including semiconductors and electric vehicles.
Trump’s declaration was made public after market close via social media and sent shockwaves through global markets, rattling investors already cautious about rising geopolitical risks.
Trump also canceled a planned meeting with Chinese President Xi Jinping at the upcoming Asia-Pacific Economic Cooperation (APEC) summit, signaling a deterioration of diplomatic engagement.
He warned that “many other countermeasures” were under consideration, emphasizing that the U.S. would no longer allow China to “hold the world captive” through rare earth export restrictions.
Impact on Tech Giants and Market Indices
Leading the tech sell-off, Nvidia – the world’s leading manufacturer of graphics processing units (GPUs) widely used in artificial intelligence (AI) and data centers – lost nearly 5% in regular trading and saw its market capitalization shrink by approximately $229 billion in one day alone.
Amazon and Tesla shared similar declines of around 5%, along with Microsoft, which dropped by $85 billion in market value.
These tech companies are not only flagship firms but also major drivers of the tech-dominant Nasdaq and the broader S&P 500 indices.
As these megacaps took a hit, the Nasdaq Composite dropped 3.6%, while the S&P 500 plunged 2.7% and the Dow Jones Industrial Average fell 1.9%, marking their worst days since April 2025 when tariff-related jitters last roiled the markets.
The sell-off wiped out trillions in market capitalization across U.S. equities, with the S&P 500 losing about $1.56 trillion on Friday alone.
The move also triggered broad risk-off sentiment, pushing investors towards safer assets such as gold and bonds, while the U.S. dollar weakened against major currencies.
Also See: Stock Market Today: Wall Street Suffers Worst Day Since April Amid Trade War Fears
Broader Market and Economic Concerns
This latest round of tariff escalation has rekindled fears of a full-blown trade war between the world’s two largest economies.
Analysts warn that the tariff hikes, combined with export controls on crucial tech products and software, could disrupt global supply chains, increase costs for U.S. manufacturers, and slow technological innovation.
Specifically, imposing a 100% tariff on Chinese imports may lead to higher prices for electronic goods, retail products, and AI infrastructure components that rely heavily on Chinese inputs, potentially dampening consumer demand and corporate earnings
Tech companies such as Amazon and Microsoft, which operate extensive cloud computing data centers renting GPU capacity vital for AI workloads, face challenges due to these export controls.
OpenAI, a major AI software developer heavily reliant on Nvidia’s GPUs sourced through Microsoft and Amazon cloud partners, could also feel the ripple effects of strained chip supply chains.
The market reaction reflects not just fundamentals but investor sentiment, which is increasingly vulnerable to geopolitical uncertainties.
While corporate earnings and balance sheets remain robust, the unpredictability around trade policy has heightened risk aversion, prompting rapid portfolio adjustments.
Outlook and Upcoming Events
Investors will be closely watching the upcoming earnings reports from Nvidia (due in November), Microsoft, and Tesla, as well as economic data releases like the Consumer Price Index later this month, which will provide more clarity on the inflation outlook amid rising costs linked to tariffs.
For now, the renewed trade hostilities between the U.S. and China mark a significant headwind for the tech sector and broader markets, signaling a volatile phase for global investors and stakeholders in advanced technology supply chains.
Source: CNBC
