The sell-off on Wall Street raises concerns about a market decline

By Chubuike

NEW YORK (Reuters) – Investors’ fears loom that the record rally for stocks on Wall Street will soon fade after… Definitions It has emerged again as a market risk.

US stock markets, which hit record highs midweek, changed hands on Friday after President Donald Trump renewed his threats to raise tariffs against China, raising concerns that potential trade drama between the world’s two largest economies could spell the end of a record rally in US stocks.

Trump, who was scheduled to meet with Chinese President Xi Jinping in South Korea in about three weeks, canceled the meeting and complained on social media about what he described as China’s plans to hold the global economy hostage after it dramatically expanded rare earth export controls on Thursday.

Talk of tariffs depresses the market

Wall Street stocks fell sharply after Trump’s comments. The Dow Jones Industrial Average fell 1.90%, the S&P 500 lost 2.71%, and the Nasdaq Composite lost 3.56%.

The S&P 500 and Nasdaq indexes recorded their largest percentage decline in one day since April 10.

The sell-off raises concerns that high stock market valuations will expire due to enthusiasm artificial intelligence It may lead to a significant decline.

The S&P 500 and Nasdaq hit new record highs on Thursday, rising about 11% and 15%, respectively, in 2025. The Dow Jones is up about 7% year to date, all of which revived memories of the dot-com bubble of the late 1990s that burst in 2000.

JPMorgan Chase CEO Jamie DamonIn an interview with the BBC on Wednesday, he warned of the growing risk of a major correction on Wall Street over the next six months to two years.

“With stocks rising in value, this sell-off is a sign of stress,” said Gene Goldman, chief investment officer at Cetera Investment Management. “Everything is priced to perfection, so uncertainty increases market stress. All of this adds uncertainty to economic growth.”

In April, Trump’s announcement of what he called Emancipation Day tariffs stunned markets and sent investors scrambling, causing S&P 500 companies to lose a total of $2.4 trillion in market value.

But some investors say the recent trade tensions between the US and China are unlikely to significantly change the course of the market, with artificial intelligence remaining the driving factor.

“This is certainly an important issue and it could call for a pushback but I don’t necessarily see it derailing the AI ​​theme that has been driving the market,” said James St Aubyn, chief investment officer at Ocean Park Asset Management.

(Reporting by Chibuike Ojoh in New York; Additional reporting by Sinead Caro in New York; Editing by Alden Bentley, Rod Nickel)