The Nasdaq Composite index, known for its focus on technology stocks, was on track to officially enter a bear market on Friday, having dropped over 20% from its recent peak. This decline was prompted by investors shifting away from risky investments due to concerns about potential trade conflicts arising from President Donald Trump's tariffs, leading to worries about a global economic slowdown.

President Trump initiated a 10% base tariff on all imports into the U.S. on April 2, alongside significant tariffs on technology manufacturing centers like China, Taiwan, and Vietnam. This move exacerbated a sell-off triggered by apprehensions surrounding AI investment, which had earlier caused the Nasdaq to enter correction territory.

The index experienced a 2.8% drop on Friday following China's announcement of a 34% increase in tariffs on American goods, marking a critical escalation in tensions.

The Nasdaq Composite index plummeted by approximately 20% from its peak on December 16, when it closed at 20,173.89. A bear market is typically recognized when an index falls by at least 20% from its most recent highest closing point, as per standard definitions.