Wall Street fell due to Trump’s threats to raise tariffs for China

Friday on Wall Street was marked by a sharp drop in stocks. U.S. President Donald Trump announced a possible 100% increase in tariffs on Chinese imports, which triggered an immediate market reaction.

Market in Motion

The S&P 500 index lost 2.7%, marking the worst performance since April. The Dow Jones fell by 878 points, and the Nasdaq dropped by 3.6%. The morning’s gains turned into losses after Trump’s statement on Truth Social about a possible tariff increase.

The discontent was caused by Chinese restrictions on the export of rare earth elements, which are critically important for technology. Trump noted that there is now no reason to meet with Xi Jinping, although a trip to South Korea was previously planned.

Domino Effect

Tensions between the U.S. and China led to a drop in stocks: six out of seven S&P 500 stocks declined. The weakening affected all sectors, including tech giants and small companies.

The market may have been overheated. Critics point to inflated stock prices, especially in the artificial intelligence sector, where they see parallels with the dot-com bubble of 2000. Even successful companies like Levi Strauss suffered, losing 12.6%.

Oil and Bonds

In the oil market, the price of U.S. crude oil fell by 4.2% to $58.90 per barrel. This occurred amid a ceasefire between Israel and Hamas, which reduced concerns about supply disruptions. Trump’s statement intensified the decline, affecting global trade and fuel consumption. Brent oil fell by 3.8% to $62.73 per barrel.

Bond Dynamics

The yield on 10-year U.S. Treasury bonds fell to 4.05% from 4.14%. The decline began before Trump’s statements and intensified after a report from the University of Michigan, which noted subdued consumer sentiment. High prices and weak labor market prospects remain in focus.

The U.S. Federal Reserve recently lowered the key interest rate due to a slowing labor market and forecasts further cuts to support the economy.

Such a day on Wall Street leaves a sense of fragility and uncertainty, where every word can change the direction of movement.