Dow Plunges 900 Points After Trump Threatens New China Tariffs

Dow Falls Nearly 900 Points Amid Rising Trade Tensions

Wall Street closed sharply lower Friday after President Donald Trump threatened a new wave of tariffs on Chinese imports, rattling investors and reigniting fears of a deepening trade war between the world’s two largest economies.

The Dow Jones Industrial Average tumbled 878 points, or 1.9%, to close at 45,479.60, while the S&P 500 lost 2.7%—its worst single-day drop since April. The Nasdaq Composite fell 3.6%, erasing recent record highs.

Trump’s comments came after China tightened its control on rare earth metals, a key resource for the technology and defense industries. Beijing’s new rules require foreign entities to obtain a license to export products containing more than 0.1% rare earth material, intensifying economic tensions.

“I was to meet President Xi in two weeks at APEC in South Korea, but now there seems to be no reason to do so,” Trump posted on Truth Social. “We are calculating a massive increase of tariffs on Chinese products coming into the United States.”

Tech Stocks Lead the Decline

Technology shares bore the brunt of the sell-off, with Nvidia sliding nearly 5%, AMD dropping 8%, and Tesla losing 5%. Analysts noted that these companies have significant exposure to China as both a manufacturing hub and a major consumer market.

“The relationship with the second-largest economy in the world just got more difficult,” said Art Hogan, chief market strategist at B. Riley Wealth.

Meanwhile, the CBOE Volatility Index spiked above 22, signaling renewed market anxiety.

Shutdown Adds to Investor Worries

The sell-off was compounded by the ongoing U.S. government shutdown, now in its 10th day, as congressional gridlock persisted. Federal layoffs began Friday, further fueling economic uncertainty.