Stocks slump on rising US-China tensions, tech sell-off

Markets fell after the opening bell on Friday morning amid rising tensions between the U.S. and China and a decline in tech shares.

The Dow Jones Industrial Average dropped roughly 150 points, about 0.5 percent, and the S&P 500 fell 0.8 percent. The tech-heavy Nasdaq composite took the steepest dive, with a 2 percent decline.

After soaring throughout the spring and early summer, stocks of major U.S. tech companies have fallen this week as investors cash out following second-quarter earnings reports. Shares of carmaker Tesla plunged more than 9 percent, while Apple, Alphabet, Amazon and Microsoft took smaller losses between 1 percent and 3 percent.

The broader market losses follow a series of flashpoints between Washington and Beijing, including the closure of a U.S. consulate in Chengdu in response to the shuttering of a Chinese consulate in Houston. Secretary of State Mike Pompeo excoriated the Chinese government in a Thursday speech, casting U.S. relations with China as a battle between the free world and tyranny.

Despite Thursday’s losses and Friday’s opening slump on Wall Street, stocks are still well above their late-March lows and have recovered almost entirely from the crash driven by the coronavirus pandemic. The Nasdaq has set several new record highs in July, the S&P 500 this week recovered its 2020 losses, and the Dow crossed over 27,000 points this week.

Even so, surging coronavirus cases, rising weekly claims for unemployment insurance, a pending wave of evictions and a lapse in boosted jobless benefits all pose major risks for the U.S. economy.