The S&P 500 fell 1.5% and was on track for its sharpest loss since Aug. 1. The Dow Jones Industrial Average was down 456 points, or 1%, as of 11:35 a.m. Eastern time, and the Nasdaq composite was 2.2% lower.
Stocks had been heading for a slight gain in the morning, until Trump took to his social media platform and said he’s considering “a massive increase of tariffs” on Chinese imports. He’s upset at restrictions China has placed on exports of its rare earths, which are materials that are critical for the manufacturing of everything from consumer electronics to jet engines.
“We have been contacted by other Countries who are extremely angry at this great Trade hostility, which came out of nowhere,” Trump wrote on Truth Social. He also said that he now sees “no reason” to meet with China’s leader, Xi Jinping, as part of an upcoming trip to South Korea.
The ratcheting up of trade tensions between the world’s two largest economies caused a widespread drop on Wall Street, with three out of every four stocks within the S&P 500 falling.
Levi Strauss dropped 12.3% for one of the market’s largest losses, even though it reported a stronger profit for the latest quarter than analysts expected. Its forecast for profit over the full year was also within range of Wall Street’s estimates, but the jeans and clothing company could be facing the challenge of high expectations. Its stock price came into the day with a stellar surge of nearly 42% for the year so far. The rest of the market is facing similar pressures. The market had been drifting near its record heights following a run where it had climbed in eight of the last 10 days.
Critics are calling the market too expensive after prices rose much faster than corporate profits, particularly for companies in the artificial-intelligence industry. For stocks to look less expensive, either their prices need to fall, or profits need to rise.
The U.S. stock market has been on a nearly relentless run and soared roughly 35% since a low in April, though momentum has slowed recently. With the U.S. government shut down again, several important economic reports that normally move the market have been delayed.
Some of Friday’s strongest action was also in the oil market, where the price of a barrel of benchmark U.S. crude sank 3.6% to $59.27.
It fell as a ceasefire between Israel and Hamas came into effect in Gaza, raising hopes for less violence in the Middle East. An end to the war could remove worries about disruptions to oil supplies, which had kept crude’s price higher than it otherwise would have been.
Brent crude, the international standard, dropped 3.3% to $63.08 per barrel.
In the bond market, the yield on the 10-year Treasury sank to 4.06% from 4.14% late Thursday.
In stock markets abroad, indexes fell across much of Europe and Asia.
Hong Kong’s Hang Seng fell 1.7%, and Japan’s Nikkei 225 dropped 1% for two of the bigger moves. But South Korea’s Kospi leaped 1.7% after trading reopened following a holiday.
as a Reliable and Trusted News Source