Trump’s Post Costs Stocks $2 Trillion in One Day

On Friday morning, Standard & Poor’s 500 It was less than a few points off another all-time high. Then, after one social media post from the president Donald Trump$2 trillion of market value was wiped out.

This collapse shows the extent of the impact of the president’s one-man trade policy on the fate of the global economy.

Trump at 10:57 a.m. ET books On his Social Truth platform, he said China has “become very hostile” to the rest of the world, especially when it comes to control of rare earth minerals. He accused China of holding the world “captive” because of its “monopoly” of these vital resources.

The main part the stock market reacted to in Trump’s 500-word post was: “One of the policies we are considering at this moment is a massive increase in tariffs on Chinese products coming into the USA.”

That’s all it took.

Specialized Investment Group It counts Nearly $2 trillion of value was wiped from the US stock market through this single post. The S&P 500 lost 2.7% as the closing bell rang on the New York Stock Exchange. It was its worst performance since early April, when the stock market was in the midst of a back-to-back sell-off from Trump’s so-called Trump campaign. Liberation day Introducing higher than expected fees for every country in the world.

the Nasdaq CompositeThe technology company’s stock, which relies on trade with China, fell 3.56%, also its worst performance since April. The Nasdaq index touched its highest level ever before Trump participated in Friday’s session.

the Dow Jones Industrial Average It fell 879 points, or 1.9%, for its worst performance since May. The Russell 2000 small-cap index fell 3%.

While the Trump administration’s trade talks with China have been progressing at a much slower pace than those with other countries, the consensus in the stock market has been that something will eventually be worked out between the two countries and that overall relations are improving. Trump and the Chinese leader Xi Jinping They are scheduled to meet at the Asia-Pacific Economic Cooperation (APEC) summit at the end of this month.

The market has also become comfortable with the tariff rate of about 40% already applied to China, arguing that the US economy is stronger than previously thought to bear it, and exemptions for products made in China – such as Apple iPhones – it was broad enough to mitigate any economic impact.

If Trump carries out his latest threat, investors fear that the burden will be too great for the US economy, which still relies on imported parts to build cars, solar panels, etc.

Perhaps the biggest risk affecting the market is China’s retaliation against American goods, which could lead to an all-out trade war.

China, Overnight through ThursdayIt has tightened its grip on the rare earth elements market, which controls about 70% of the global supply. Beijing has said that overseas entities must obtain licenses to export almost anything using its rare earths, and companies that use the minerals in military applications will be rejected. The companies’ use will be reviewed on a case-by-case basis by China.

Rare earths are essential for making semiconductors, electric vehicles, and materials for advanced rockets. Trump is trying to boost American supplies of the metal by supporting, and even investing in, American and Canadian companies that extract the metal.

Chip makers such as Nvidia and AMD He led the stock market’s decline on Friday. Nvidia, which is still trying to get support from both countries to sell a less advanced AI chip to China, lost 5%. AMD, which was leading the last leg of the rally, fell by almost 8%. apple The stock lost 3%, while Tesla stock lost 5%.

But it was not only shares of companies directly related to Chinese trade that fell. It was a broad market sell-off, with 424 members of the S&P 500 closing in the red. Professional investors were forced to reduce risks in everything due to a sudden decline of this magnitude. With their technology centers damaged, their other holdings had to be sold to raise funds. In addition, there is the threat posed by potential new tariffs to the US economy. Local finance Bank of America and Wells Fargo Lost more than 2% each, for example.

Some stocks managed to stay in the green during the day. Walmart Tobacco/nicotine stocks were slightly higher due to their defensive properties.

Monday could be another tough day for markets because Trump followed up his morning post after the closing bell by saying he would duty Imposing 100% tariffs on China “in addition to any tariffs they currently pay.”

Trump added that the United States would place export controls on “any and all critical software,” which could significantly impact AI leaders like Nvidia. The new tariffs will begin at the beginning of next month, around the time of the summit when Trump was scheduled to meet with Xi. Trump’s post on Friday morning indicated that those talks may not happen now.

the SPDR S&P 500 ETFa fund that tracks the S&P 500, added slightly to Friday’s session losses after the bell.

However, some traders and investors believe it may be wise to wait to see if Trump fully carries out this threat. Most of the tough tariffs threatened in early April — which sent global markets tumbling — were later significantly scaled back through negotiations and waivers, laying the groundwork for a massive return to new market highs. It was worth calling Trump out for bluffing and buying the dip — and many investors believe he will do it again.

“The good news is that this may be just another negotiating tactic used by management that could pay off in the long run,” Jay Woods, chief market strategist at Freedom Capital Markets, said during the peak of selling pressure on the New York Stock Exchange. “The knee-jerk selling should be another buying opportunity.”

It helps to have some perspective on Friday’s sell-off as well. The decline sent the S&P 500 back to its lowest level in a month. The index is still up more than 11% this year, as seemingly unstoppable AI trading overshadows any threat from tariffs, global conflicts and ongoing government shutdowns.

The move disrupted an unusually quiet period for the stock market, sending complacent investors running for cover for the first time in a long time, adding to the pain. Thursday was the 33rd straight day without the S&P 500 moving 1% in either direction, the longest quiet streak since January 2020. The market has not seen a significant decline since the April tariff correction.

One risk is that this sell-off causes other things to break on Wall Street. There is a small, but still growing, contagion related to the bankruptcy of First Brands, a private supplier of auto parts. It sours the banks with such exposure Jefferies Financial Group and raising concerns about the once-thriving private credit industry. Jefferies fell 4% on Friday and another 6% in after-hours trading.

This is an area to watch, along with the possibility that large hedge funds buying on margin were held too long on Friday and must now deleverage aggressively, which could add to selling pressure next week. Cryptocurrency markets, especially smaller currencies outside of Bitcoin, were hit particularly hard on Friday. TRUMP meme coin is down 20% in the last 24 hours.

Stock market futures are open for trading Sunday evening at 6 PM Eastern Time. The bond market is closed on Monday for Columbus Day.