Traders are on the ground at the New York Stock Exchange during morning trading.
Angela Weiss | AFP | Getty Images
Stocks fell sharply on Friday after President Donald Trump accused China of becoming “very hostile” over its restrictions on rare earth metals, a key resource for high-tech and defense industries, and threatened to raise tariffs on the country.
of Dow Jones Industrial Average It fell by 560 points (1.2%). of S&P500 decreased by 1.7%, but Nasdaq Composite It fell 2.3%. Stocks rose sharply ahead of President Trump’s remarks, with the Nasdaq hitting a new intraday high.
“I was scheduled to meet with President Xi at APEC in South Korea in two weeks, but there appears to be no reason to do so now,” Trump said in a post on Truth Social. “One of the policies we’re considering right now is a significant increase in tariffs on Chinese goods coming into the United States.”
President Trump has accused China of using rare earth metal resources to hold the Earth “prisoner.” Earlier this week, China tightened its controls on the market, announcing that foreign companies will need to obtain permission from Beijing to export items containing rare earths worth more than 0.1% of their value.
“Hopes for a China trade deal have been completely blown away,” said Jeff Kilberg, founder of KKM Financial. “Profit-taking groups are coming out in full force.”
Dow, daytime
Tech stocks, which have suffered the most losses from the deterioration of trade relations with China, led the sharp decline on Friday. Nvidia Although it decreased by more than 2%, AMD fell more than 5%, tesla Decreased by more than 3%. meanwhile, usa crude oil Stocks fell as investors grew concerned that higher tariffs would ultimately stifle demand.
“It’s no surprise that technology stocks are the biggest decliners today because they have significant exposure to China, both in terms of manufacturing and large customers,” Art Hogan, chief market strategist at B. Riley Wealth, told CNBC. “Clearly, relations with the world’s second-largest economy are becoming increasingly difficult,” he said.
The setback on relations with China came as the US government shutdown extended into its 10th day on Friday, adding to the bearish mood to end the week. The Senate failed for the seventh time Thursday to pass dueling emergency funding proposals that would have ended the suspension. So far, there are no signs that Republicans and Democrats have made meaningful progress in negotiations.
Trump administration Budget Secretary Russell Vought said in a social media post Friday that federal employee layoffs have “begun” as the government shutdown continues.
Friday’s decline erased the S&P 500’s gains this week. The benchmark is now on track to decline more than 1% over the same period. The Nasdaq and Dow were also expected to decline by more than 1% and around 2%, respectively, for the week.
