The NASDAQ is now down 7% from its recent highs
The NASDAQ Composite Index fell 0.4% on May 28—its fifth decline in seven sessions—as trade tensions between the United States and China took a turn for the worse. The index is now down nearly 7% from the high of 8,176 it reached one month ago in intraday trading.
The US-China trade war continued to spook investors after President Donald Trump suggested that a near-term deal between the two countries was unlikely. Tariffs on Chinese goods are likely to increase considerably.
Stocks with high exposure in China have tumbled
Tech stocks Apple, Intel, and NVIDIA, which have significant exposure in China, have seen falls of 11.2%, 14.7%, and 21.0%, respectively, in May. However, Internet players Facebook, Snapchat, and Google, which have minimal to no exposure to China, ticked up on May 29. In fact, Facebook has been the best-performing FAANG stock in May.
Meanwhile, the US economy, which has been relatively steady amid fears of a global slowdown, has shown some signs of deterioration. Data on new home sales, durable goods, manufacturing, and retail have all pointed to a slowdown in the world’s biggest economy.
The tech-rich NASDAQ Composite Index is still up 14.7% year-to-date, though—thanks more to the Fed’s loose monetary policy than strong earnings growth.