Stock Market Today: Dow Sinks 500 Points as Trump’s Tariff Threats Cause Turmoil
US stocks fell on Friday after President Trump escalated rhetoric against China, threatening a “massive increase” in tariffs on Chinese goods. The steep downturn added to an already volatile week, with Wall Street rattled by trade tensions, a government shutdown, and unease over upcoming earnings season.
The Dow Jones Industrial Average dropped more than 500 points, or 1.25%, to trade at 45,780. The S&P 500 slid 1.8%, while the Nasdaq Composite led losses with a 2.5% plunge as investors fled high-growth names most vulnerable to renewed tariffs. The sell-off places all three major indices on track to close the week firmly in the red, snapping their recent streak of record highs.
Market Movers:
- Qualcomm (QCOM) – down 5%: Shares dropped after Beijing announced an antitrust probe into the chipmaker’s $4.5 billion Autotalks acquisition, citing potential monopoly concerns. The move highlights how US tech companies are increasingly being caught in the crossfire of trade disputes, raising investor worries about future regulatory hurdles in China.
- Alibaba (BABA) – down 8%: Alibaba dove after Trump said he would cancel his planned meeting with Xi Jinping at the APEC summit. The cancellation, paired with threats of sweeping new tariffs, hammered Chinese tech giants across the board, with Tencent and Baidu also sliding.
- MP Materials (MP) – up 13%: MP Materials rallied after Trump accused Beijing of weaponizing rare earth minerals. Investors piled into US-based producers as fears of export restrictions reignited concerns about supply security for industries ranging from semiconductors to defense.
- Brent Crude Oil (BZ=F) – down 3%: Oil prices slumped as escalating trade tensions overshadowed geopolitical risks, with Brent crude sliding below $63 per barrel. News of progress on a Gaza peace framework further eased supply fears, accelerating this week’s energy sector decline.
Trade Tensions Rattle Markets
Trump’s Truth Social post targeted China’s leadership directly, hinting at fresh punitive measures. The remarks followed Beijing’s new port fees on US vessels and its decision to halt soybean purchases, deepening the trade rift between the two economic superpowers. With no resolution in sight, analysts warn investors should brace for higher volatility. The abrupt cancellation of a Trump-Xi meeting further dimmed hopes for a near-term thaw. Chinese equities bore the brunt, with losses rippling into US markets as investors reassessed the risk of supply chain disruptions and slower global growth.
Consumer Sentiment and Shutdown Impact
Amid the political drama, investors turned to private data releases as the government shutdown stretched into its tenth day, delaying key federal reports. The University of Michigan’s October survey showed consumer sentiment at 55, barely changed from September, but still near multi-year lows. Concerns over high prices and job prospects remained top of mind for households.
Economists caution that while consumers have proven resilient in spending on premium goods and services, prolonged uncertainty could weigh on confidence. The absence of official labor and inflation figures has left markets flying partially blind, amplifying the influence of private surveys and corporate earnings as data substitutes.
Commodities in Focus
Rare earth stocks soared as investors scrambled to price in the risk of tighter Chinese export controls. MP Materials and USA Rare Earth each gained double digits, highlighting investor appetite for US alternatives in strategic minerals. Meanwhile, oil markets extended a sharp weekly decline, driven by easing supply concerns in the Middle East and mounting fears that tariffs will sap global demand.
Precious metals offered some stability, with gold holding near record levels above $4,000 an ounce as investors hedged against political and economic turbulence. The divergence in commodity markets underscored shifting investor priorities between growth fears and safe-haven demand.
Looking Ahead
Attention is now shifted to earnings season, set to kick off next week with reports from JPMorgan, Citigroup, and other major banks. Analysts expect results to reflect mounting tariff pressure on revenue streams, alongside cautious guidance given the unsettled trade backdrop. At the same time, investors will monitor Fed signals and political developments in Washington, where the shutdown shows no signs of ending.
The combination of geopolitical uncertainty, delayed economic data, and looming earnings leaves markets on edge. Whether AI optimism and corporate resilience can offset escalating trade risks will be the defining question for the weeks ahead.
