Minutes into trading, all three major indexes fell, with the Dow Jones Industrial Average retreating 0.4 percent to 42,068.66.
The broad-based S&P 500 Index also lost 0.4 percent to 5,888.83, while the tech-focused Nasdaq Composite Index slid 0.5 percent to 19,090.33.
“While there’re several negotiations we’re watching, the China situation is the one that makes or breaks the US economy,” said Christopher Low of FHN Financial.
Earlier Friday, Trump wrote on his Truth Social platform that Beijing “totally violated its agreement with us,” although he did not go into details.
His comments came after Washington and Beijing agreed to mutually lower tariffs on each other’s imports this month, bringing levels down from triple digits for 90 days.The stocks pullback came despite data showing that US inflation cooled more than expected last month.The personal consumption expenditures (PCE) price index — which is the Federal Reserve’s preferred inflation measure — rose 2.1 percent from a year ago, according to the Commerce Department.
This was down from a 2.3 percent figure in March.
Should the world’s two biggest economies go back to triple-digit tariff levels, the United States and global economy “will almost certainly see a recession,” Low said.
“That has huge implications for corporate profits,” he added.
Investors are also eyeing uncertainty surrounding the legal challenges to Trump’s most sweeping tariffs — which he turned to emergency economic powers to impose.