Stock Market Suffers Sharp Losses After Trump’s Tariff Threat
The Dow Jones Industrial Average fell 604 points, or 1.3%, the S&P 500 lost 1.9%, while the Nasdaq Composite sank 2.7%, as per the CNBC report. Earlier in the day, markets had been trading higher, with the Nasdaq even touching a new all-time intraday high before Trump’s comments reversed sentiment, as per the report.
Trump Cancels Meeting with Xi, Signals New Tariff Plans
Trump wrote on Truth Social, “I was to meet President Xi in two weeks, at APEC, in South Korea, but now there seems to be no reason to do so,” adding that, “One of the policies that we are calculating at this moment is a massive increase of tariffs on Chinese products coming into the United States of America,” as quoted by CNBC.
The US president accused China of holding the world “captive” through its control of rare earth metals. Earlier this week, Beijing tightened export controls, requiring foreign entities to obtain licenses for any goods containing 0.1% or more of rare earth materials, reported CNBC.
Jeff Kilburg, founder of KKM Financial said that, “Expectations for a China trade deal just got swept off the table,” adding that, “Profit takers are out in full force,” as quoted in the report.
ALSO READ: Melania Trump, Putin team up to reunite Ukrainian children with their parents, 8 kids already reunited
US Tech Stocks Fall Hard as US-China Trade Tensions Escalate
Tech stocks, many of which depend heavily on China for manufacturing and sales, were among the day’s biggest losers on Friday, as per the CNBC report. AMD plunged more than 6%, Tesla dropped over 4%, and Nvidia lost more than 2%, as per the CNBC report. The Magnificent Seven stocks all dropped, with Amazon tumbling more than 3%, and Apple slipping 2%, as per the report.
Art Hogan, chief market strategist at B. Riley Wealth, said that, “It’s not surprising to see technology related stocks down the most today as they have significant exposure to China in both manufacturing and as a large customer,” adding, “Clearly, our relationship with the second largest economy in the world just got more difficult,” as quoted in the CNBC report.
Mosaic, Levi Strauss Among Top Losers in S&P 500
Mosaic was also one of the worst-performing stock in the S&P 500 after the fertilizer maker reported problems at two of its plants significantly held back production and Levi Strauss stock also dropped after the jeans maker said tariffs would negatively impact current-quarter results, as reported by Investopedia.
Chinese Stocks Crash: Alibaba, Baidu, JD.com, PDD Holdings Tumble
China-based companies listed in the US were also hit hard, which includes, Alibaba and Baidu, with each dropping about 8%, while JD.com and PDD Holdings slid 6.6% and 5.2%, respectively, as per the CNBC report. Even the iShares MSCI China ETF (MCHI), which tracks major Chinese companies listed in the US, fell 5.2%, reported CNBC.
US Government Shutdown Deepens Investor Anxiety
The sell-off came as the US government shutdown entered its 10th day, further weighing on market sentiment, as per the report. The Senate has now failed seven times to pass funding measures to reopen the government, with no visible progress in negotiations.
Trump administration budget chief Russell Vought said in a social media post that layoffs of federal workers have begun amid the ongoing US government shutdown, as reported by CNBC.
FAQs
Why did US stocks fall today?
Because president Trump threatened a “massive” increase in tariffs on Chinese imports, sparking fears of a renewed trade war, as per the CNBC report.
Which tech companies saw the biggest losses?
AMD plunged more than 6%, Tesla dropped 4%, and Amazon fell over 3%.
as a Reliable and Trusted News Source