Stocks plunged sharply on Friday after President Donald Trump issued a stark warning of potential higher tariffs on China, citing the nation’s “hostile” approach regarding its control of rare earth metals-crucial resources for technology and defense sectors. The Dow Jones Industrial Average tumbled 735 points, or 1.6%, marking its largest drop since mid-June. The S&P 500 followed suit, declining 2.2%, while the Nasdaq Composite fell by 2.9%. Prior to Trump’s remarks, the market had been on an upswing, with the Nasdaq even reaching a new all-time intraday high.
In a post on Truth Social, Trump expressed skepticism about his upcoming meeting with Chinese President Xi Jinping, slated for two weeks from now at the APEC summit in South Korea. “There seems to be no reason to do so,” he stated, revealing that his administration is contemplating a “massive increase” in tariffs on Chinese imports. He accused China of exploiting its rare earth metals resources to hold the global market “captive.” Earlier in the week, China tightened its grip on rare earth exports, requiring licenses for foreign entities to export products containing 0.1% or more of these valuable resources.
Jeff Kilburg, founder of KKM Financial, noted that the implications of a trade deal with China now seem bleak. “Expectations for a China trade deal just got swept off the table,” he remarked. As a result, profit-taking appeared to escalate among investors, leading to the rapid sell-off.
The tech sector, heavily dependent on Chinese markets for both manufacturing and sales, experienced the brunt of the declines. Nvidia dropped over 3%, AMD plummeted more than 6%, and Tesla lost upwards of 4%. Art Hogan, chief market strategist at B. Riley Wealth, stated, “It’s not surprising to see technology-related stocks down the most today,” emphasizing that the rocky relationship with China-now the world’s second-largest economy-has made conditions increasingly difficult for U.S. firms.
Compounding the bearish sentiment was the ongoing U.S. government shutdown, which entered its tenth day on Friday. The Senate failed to pass stop-gap funding proposals for the seventh time, leaving little indication of progress between Republicans and Democrats. Amid the shutdown, federal worker layoffs have already commenced, as noted by Russell Vought, budget chief under the Trump administration.
The Friday drops effectively erased the S&P 500’s gains for the week, setting it on pace to finish down more than 1%. The Dow and Nasdaq also looked to close the week in the red, with projected weekly losses exceeding 1% and 2%, respectively. As the markets navigate the complexities of trade relations and domestic political strife, investors remain on high alert for further developments that could affect economic stability and growth.
Tags: Stock Market, President Trump, China Trade, Dow Jones, S&P 500, Nasdaq, Rare Earth Metals, U.S. Economy.
Original Source: https://www.cnbc.com/2025/10/09/stock-market-today-live-updates.html
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Publish Date: 2025-10-11 00:55:00
