April 3 (Reuters) - The Nasdaq looked set to confirm a

bear market on Friday, down more than 20% from its record high,

as China and the U.S. entered a tit-for-tat tariff war that

raised recession fears and clouded the outlook for tech

companies spearheading the AI revolution.

The tech-heavy index, home to six trillion-dollar market cap

companies, hit a record closing high of 20,173.89 on December

16, but has struggled since the start of the year. Fears of a

potential slowdown in AI spending had pushed it into correction

territory earlier last month.

The index was last down 3.6% on Friday, after China

announced additional tariffs of 34% on U.S. goods in response to

U.S. President Donald Trump's heavy levies on Wednesday.

If the U.S. tariffs went into place at current form,

"overall tech earnings would come down 15% at least, the supply

chain will be a Rubik's Cube rivaling Covid days, and the

economy would go into a recession/stagflation," said Wedbush

analyst Dan Ives.

The other indexes too have been hammered. The blue-chip Dow

was on track to confirm a correction on Friday, a 10%

drop from its record closing high, while the benchmark S&P 500

Index is down 15.3% from its all-time closing high.

An ETF tracking the Magnificent Seven stocks, the

heavyweight tech adjacent names that have powered Wall Street's

rise to record levels in recent years, has slumped 27.6% from

its December record high.

Apple ( AAPL ), the world's most valuable listed company, is

down 12% since the new U.S. levies were announced, as its major

manufacturing production base, China, faces an aggregate 54%

tariff rate.

The other big tech stocks have also tumbled.

Including Thursday's losses, Google-parent Alphabet

is down 4.5% and Microsoft ( MSFT ) 2.6%. Meta

Platforms ( META ) has slumped 12.4% and Amazon ( AMZN ) has

shed 10.6% in the same period.

"Companies like Apple ( AAPL ), Microsoft ( MSFT ), Alphabet, Amazon ( AMZN ), and

Nvidia ( NVDA ) - already navigating regulatory scrutiny and supply chain

recalibrations - now face an additional layer of complexity

because China is not only a vital consumer market but also a

critical node in production," said Michael Ashley Schulman,

chief investment officer at Running Point Capital.

"A 34% tariff will force firms (big tech and small tech) to

rethink pricing, margins, and even geographic focus, as shifting

final assembly or diversifying markets becomes more urgent," he

said.

Tesla has plunged 13.1% since Wednesday's close as

the electric-vehicle pioneer grapples with slowing sales and

relentless protests against CEO Elon Musk's involvement in the

Trump administration and right-wing politics in Europe.

Chipmaker Nvidia has shed 13.6%, as the biggest winner of

the AI boom grapples with worries over slowing spending on data

centers.

"The concept of taking the U.S. back to the 1980s

'manufacturing days' with these tariffs is a bad science

experiment that in the process will cause an economic Armageddon

in our view and crush the tech trade, AI Revolution theme, and

overall industry in the process," Ives said.

Shares of PC makers and server makers have tumbled as

electronics, the second biggest U.S. imports, primarily come

from countries with some of the steepest tariff rates.

PC makers Dell Technologies ( DELL ) and HP are down

22.3% and 19.1%, respectively, this week. Server maker Hewlett

Packard Enterprise ( HPE ) has lost 21.8% and Super Micro

Computer ( SMCI ) about 14.4% week to date.