Market Selloff Deepens After Trump Hints at Canceling China Meeting- Wall Street ended the week on a sharp downturn Friday after President Donald Trump suggested on Truth Social that he might call off an upcoming meeting with China’s president and could implement a “massive increase in tariffs” on Chinese imports. The sudden remarks reignited trade tensions between the world’s two largest economies, erasing earlier gains and rattling investors.
The Nasdaq Composite sank about 2.7%, while the Dow Jones Industrial Average tumbled nearly 600 points, or 1.3%, after briefly trading in positive territory earlier in the session. The S&P 500 also slumped, dragged down heavily by semiconductor and technology shares.
In his social media post, Trump accused China of becoming “very hostile” and alleged that Beijing is sending letters globally, warning other nations about potential export restrictions on vital materials — including rare earth elements essential to electronics and defense production.
“Nobody has ever seen anything like this,” Trump wrote. “Essentially, it would clog the markets and make life difficult for virtually every country in the world, especially for China.”
Chip Stocks Take a Beating
U.S. semiconductor companies bore the brunt of Friday’s selloff. AMD plunged around 6%, Broadcom lost 4%, and Qualcomm shares dropped 5% after reports that Chinese regulators had opened a new antitrust investigation into the chipmaker.
The moves followed news that Beijing was escalating its trade countermeasures, announcing new export restrictions on rare earths — minerals that are key to producing semiconductors, smartphones, and renewable energy technologies. China also introduced a special port fee on U.S. vessels, signaling that trade relations between Washington and Beijing could worsen in the weeks ahead.
The timing of Trump’s comments further fueled anxiety among investors already on edge about the ongoing U.S. government shutdown, now stretching into its tenth day.
China Tightens Its Grip on Trade
China’s latest policy actions were seen as a strategic effort to pressure Washington in ongoing trade negotiations. By controlling the export flow of rare earths — materials for which China dominates global supply — Beijing is reminding the U.S. of its leverage in high-tech manufacturing chains.
Market analysts said the restrictions could ripple through multiple industries, from electronics and electric vehicles to defense systems, potentially causing production delays and higher costs. “If rare earth exports slow, it’s not just a supply issue — it’s a political message,” said one senior economist.
Gold Surges, Oil Falls
In the commodities markets, gold prices climbed back above $4,000 per troy ounce, as investors sought safety amid growing uncertainty. Meanwhile, oil prices dropped sharply, reflecting fears of slowing economic activity if the trade conflict intensifies and the U.S. government shutdown drags on.
Washington Stalemate Adds to Investor Jitters
Adding to the sense of instability, Congress remained gridlocked as the shutdown entered double digits. The Senate adjourned late Thursday without reaching a funding deal and isn’t expected to reconvene until Tuesday.
Behind the scenes, several senators have reportedly begun exchanging ideas on potential compromises involving healthcare and budget allocations, but there is little indication that a breakthrough is near. Betting markets now show rising odds that the impasse could last through October, worsening the economic drag and further shaking investor confidence.
A Tumultuous End to the Week
Friday’s selloff marked a dramatic reversal for U.S. markets, which had been showing tentative recovery earlier in the week. With geopolitical tensions rising, supply chain risks returning, and domestic politics in turmoil, investors appear to be bracing for a volatile October.
As one Wall Street strategist summarized, “The markets have moved from optimism to fear — and right now, fear is in control.”
