US equity markets just recorded their worst week of the year. Barring May 10, the S&P 500 (SPY) saw downward price action every day last week. The markets were down sharply on May 10 but finally managed to close marginally in the green.
The SPDR S&P 500 ETF is now down 2.0% in May, while the Invesco QQQ ETF (QQQ) is down 2.4%.
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Last week’s sell-off was driven by President Donald Trump’s surprise announcement that the United States would increase tariffs on $200 billion worth of Chinese goods. The president made the announcement last weekend and went ahead with the tariff hike on May 10. The tariffs were increased even as US-China talks were underway. Last year, both the United States and China also imposed tariffs on each other’s goods as talks were underway.
Last week, Activision Blizzard (ATVI) fell 2.4%, while GameStop (GME) saw downward price action of 5.4%. Electronic Arts (EA) and Take-Two Interactive Software (TTWO) saw upward price action of 1.5% and 1.7%, respectively. Gaming stocks are having a somber year, and most companies are underperforming the broader markets.
YTD (year-to-date) price action, Take-Two Interactive and Activision Blizzard are trading flat for the year. GameStop has fallen more than 30% this year. Last month, GameStop fell to multimonth lows after lowering its guidance. Electronic Arts is outperforming other gaming stocks by a wide margin. The stock is up 19% YTD.