Dow Plunges Nearly 900 Points After Trump Threatens New Tariffs on China

U.S. stocks plunged Friday as President Donald Trump threatened to impose new tariffs on China, sparking fears of a renewed trade war between the world’s two largest economies.

The Dow Jones Industrial Average fell 879 points, or 1.9%, while the S&P 500 dropped 2.71% and the Nasdaq slid 3.56%. It was the worst trading day since spring, wiping out about $1.56 trillion in market value, according to FactSet data.

The sell-off followed a Truth Social post from Trump suggesting a “massive increase” in tariffs on Chinese imports. The president said China had become “very hostile” in trade dealings and accused Beijing of restricting rare earth exports vital to U.S. industries.

The threat immediately rattled global markets, sending the CBOE Volatility Index up 32% — its highest level since June. Analysts said the announcement caught traders off guard after months of relative calm.

“The ramping up of tensions with China is the big story,” said Ross Mayfield, investment strategist at Baird. “It definitely caught markets off guard.”

Tech stocks were hit hardest, with Nvidia dropping nearly 5% and AMD down almost 8%. Meanwhile, U.S.-based rare earth companies rose as investors anticipated domestic production gains.

Investors flocked to safe havens like U.S. Treasury bonds, gold, and silver, while oil prices tumbled more than 4% amid fears that the trade dispute could slow global growth.

“The sell-off has the potential to evolve into a larger correction,” said Michael O’Rourke, chief market strategist at JonesTrading. “Greed has far outpaced fear in the market, and that complacency leaves investors vulnerable.”

With Trump hinting at canceling his planned meeting with Chinese President Xi Jinping at the upcoming APEC summit, markets are bracing for more turbulence.

Credit: CNN Newsource
Explore: NBCPalmSprings.com, where we are connecting the Valley.