Wall Street ended sharply lower on Friday after U.S. President Donald Trump intensified his trade conflict with China, announcing a sweeping 100% tariff on Chinese imports and new export controls on critical U.S.-made software. The move followed Beijing’s tighter restrictions on rare earth exports, sparking renewed fears of a full-blown trade war between the world’s two largest economies.
The announcement sent Big Tech stocks tumbling, with Nvidia, Tesla, Amazon, and AMD all dropping more than 2% in after-hours trading. During regular trading, the S&P 500 and Nasdaq suffered their biggest one-day percentage losses since April 10, while the Dow Jones Industrial Average fell 878.82 points, or 1.90%, to 45,479.60. The S&P 500 plunged 2.71% to 6,552.51, and the Nasdaq Composite lost 3.56% to 22,204.43. The Philadelphia Semiconductor Index slumped 6.3%, deepening losses in chip stocks.
Analysts say Trump’s surprise announcement amplified investor anxiety. “The two largest economies are arguing again, and markets are reacting with a sell-first, ask-later mentality,” said Carson Group strategist Ryan Detrick. The CBOE Volatility Index hit its highest closing level since June, signaling mounting investor fear.
Chinese tech giants Alibaba, JD.com, and PDD Holdings slid between 5.3% and 8.5%. Meanwhile, Qualcomm dropped 7.3% after reports of a Chinese antitrust probe into its acquisition of Israel’s Autotalks.
The escalating tensions come as the U.S. government remains in its 10th day of shutdown, delaying official economic data releases. Independent surveys, like the University of Michigan’s consumer sentiment index, show confidence hovering near historic lows amid high prices and job market concerns.
Looking ahead, investors await earnings from major U.S. banks including JPMorgan, Goldman Sachs, Citigroup, and Wells Fargo, with analysts forecasting 8.8% year-over-year S&P 500 earnings growth in Q3.
Friday’s rout underscores rising uncertainty as trade, tech, and policy risks collide, leaving markets braced for continued volatility this October.