Breakdown of Was machst du?
du
you
du is informal, so don't use it with strangers, except if they are children. You might use it if your friend brings his buddies along, but generally we tend to first offer someone the right to use du with us.
was
what
machen
to make; to do
Like English we have two similar verbs: to do (tun) and to make (machen).
However in English it is more common to do things. To make is mainly used in the context of producing something. (cake, homework, chairs...)
In German it is the opposite. We prefer machen for both meanings, and use tun only in certain expressions.
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