Tech stocks tumbled on Friday after U.S. President Donald Trump said he was thinking of a “massive increase” in tariffs on Chinese products after China tightened its rare earth export rules on Thursday.
“They are becoming very hostile, and sending letters to Countries throughout the World, that they want to impose Export Controls on each and every element of production having to do with Rare Earths, and virtually anything else they can think of, even if it’s not manufactured in China,” said Trump in a post on Truth Social.
On Thursday, China tightened its rare earth export rules that could create issues for an array of companies involved in the semiconductor supply chain, as these elements are crucial in the manufacturing of many high-tech products.
“For every Element that they have been able to monopolize, we have two. I never thought it would come to this but perhaps, as with all things, the time has come. Ultimately, though potentially painful, it will be a very good thing, in the end, for the U.S.A. One of the Policies that we are calculating at this moment is a massive increase of Tariffs on Chinese products coming into the United States of America. There are many other countermeasures that are, likewise, under serious consideration,” said Trump.
Trump and his Chinese counterpart, Xi Jinping are slated to meet in the coming weeks. However, following China’s move, the meeting may not happen, according to Trump. “I was to meet President Xi in two weeks, at APEC, in South Korea, but now there seems to be no reason to do so.”
“Nobody has ever seen anything like this but, essentially, it would “clog” the Markets, and make life difficult for virtually every Country in the World, especially for China. We have been contacted by other Countries who are extremely angry at this great Trade hostility, which came out of nowhere,” Trump went on to say in his post.
AI chipmakers Nvidia (NASDAQ:NVDA) fell about 2%, while Advanced Micro Devices (AMD) tumbled around 6%. Broadcom (AVGO) slipped nearly 3%, while Qualcomm (QCOM) fell roughly 5%. Earlier today it was reported that a Chinese regulator started an investigation into the months-old Qualcomm’s acquisition of Autotalks.
Shares of GlobalFoundries (GFS) slumped nearly 6%, Taiwan Semiconductor Manufacturing (TSM) and Lattice Semiconductor (LSCC) fell about 4% each. Analog Devices (ADI) declined around 3%, Marvell Technology (MRVL) and Texas Instruments (TXN) fell about 2% each. Intel (INTC) dipped nearly 1%.
Meanwhile, chip equipment makers: Lam Research (LRCX) tumbled about 5%, ASML (ASML) and KLA (KLAC) nearly 4%, Applied Materials (AMAT) around 3%.
Several software stocks were also in the red on Friday. Shares of software giant Microsoft (MSFT) dipped about 1%, while creative software maker Adobe (ADBE) declined nearly 2%. Palantir Technologies (PLTR), which develops software platforms for the intelligence community, also fell around 2%.
Asana (ASAN) tumbled about 7%, while Pegasystems (PEGA) declined nearly 3%. Innodata (INOD), Snowflake (SNOW), and monday.com (MNDY) each dipped around 2%. Salesforce (CRM), Workday (WDAY), and Atlassian (TEAM) fell about 1% each. Oracle (ORCL) seemed to buck the trend and was in green.
Several cybersecurity stocks were also among the losers. Fortinet (FTNT) slumped about 3%. CrowdStrike (CRWD) and Datadog (DDOG) declined around 2% each, while Cloudflare (NET) dipped nearly 1%.