US close: Stocks plummet as Trump reignites US-China trade tensions

(Sharecast News) - A resurfacing of geopolitical tensions hammered US stocks on Friday, with volatility levels hitting their highest in six months after Donald Trump stepped up his protectionist trade measures against China, breaking a tariff truce that has been in place for months.

Stocks were widely sold off after Trump said he would slap an extra 100% tariff on China and impose new export restrictions on certain software products following Beijing's newly announced export controls on rare-earth materials.

In a post on Truth Social, Trump called off a scheduled meeting with counterpart Xi Jinping in two weeks, saying he sees "no reason" to attend. "Dependent on what China says about the hostile 'order' that they have just put out, I will be forced, as President of the United States of America, to financially counter their move," Trump said.

Despite starting with solid gains, the Dow fell 1.9%, while the S&P 500 slumped 2.7% and the Nasdaq tanked 3.6% - the latter two's biggest one-day decline since April. At the same time, the closely followed VIX volatility index rose to its highest level since April.

"Just when traders thought the fog of tariff uncertainty had lifted, the trade war ghosts came storming back into the room - this time dragging the AI bubble, rare earths, and presidential politics along for the ride," said Stephen Innes, managing partner at SPI Asset Management.

"The week closed with a market rout that felt like d�j� vu from April: stocks cratered, oil spilled, crypto wobbled, and traders bolted for the safety of Treasuries, gold, and good old-fashioned cash."

Meanwhile, the US Federal government remained shut down on Friday after the Senate failed for a seventh time to pass a stopgap funding bill on Thursday, with little sign of progress in negotiations between Republicans and Democrats, with the ongoing stalemate delaying key economic data releases.

In economic data, US consumer sentiment remained weak in October, according to a preliminary survey released on Friday. The University of Michigan's consumer sentiment index came in at 55.0, down from 55.1 the month before and 70.5 in October 2024. Still, it was above consensus expectations for a reading of 54.0.

Market movers

Just three stocks on the Dow finished in positive territory, with consumer staple names McDonalds, Coca-Cola and Walmart gaining on their defensive properties. Meanwhile, PepsiCo results the previous day offered some reassurance on consumer demand after the American soft drinks and snacks giant reported an acceleration in revenue growth in the third quarter.

Attention now turns to next week and the beginning of Q3 earnings season, with major banks including Citigroup and JPMorgan set to report throughout the week.

Tech stocks were widely sold off, but chipmaker Qualcomm was in focus after Chinese regulators said they would investigate its acquisition of Israeli firm Autotalks, adding to tensions between Washington and Beijing China's State Administration of Market Regulation said it suspects Qualcomm of breaching anti-monopoly laws in relation to the deal, which officially closed in June.

Nvidia, Micron Technology, Synopsys and Amazon.com were among the other heavy fallers in the tech sector.

Dow Jones - Risers

McDonald's Corp. (MCD) $297.34 1.09%

Coca-Cola Co. (KO) $67.03 1.01%

Walmart Inc. (WMT) $102.07 0.07%

Dow Jones - Fallers

Dow Chemical Co. (DOW) $20.72 -6.48%

Nike Inc. (NKE) $65.00 -4.17%

Intel Corp. (INTC) $36.37 -3.78%

International Business Machines Corporation (CDI) (IBM) $278.23 -3.61%

Unitedhealth Group Inc. (UNH) $352.82 -3.59%

Apple Inc. (AAPL) $245.27 -3.45%

3M Co. (MMM) $148.89 -2.70%

American Express Co. (AXP) $316.90 -2.52%

Boeing Co. (BA) $211.21 -2.44%

Verizon Communications Inc. (VZ) $39.86 -2.40%

S&P 500 - Risers

PepsiCo Inc (PEP) $150.08 3.71%

AutoZone Inc. (AZO) $4,078.87 2.72%

O'Reilly Automotive Inc. (ORLY) $102.15 2.44%

H&R Block Inc. (HRB) $50.83 2.38%

Philip Morris International Inc. (PM) $160.97 2.31%

Southern Co. (SO) $98.11 2.25%

Duke Energy Corp. (DUK) $126.99 1.85%

Consolidated Edison Inc. (ED) $102.35 1.58%

Republic Services Inc. (RSG) $225.11 1.57%

CVS Health Corp (CVS) $77.93 1.51%

S&P 500 - Fallers

Synopsys Inc. (SNPS) $438.92 -9.39%

Mosaic Company (MOS) $30.41 -9.24%

Kohls Corp. (KSS) $14.07 -8.45%

Paypal Holdings Inc (PYPL) $69.84 -7.80%

Stanley Black & Decker Inc. (SWK) $64.45 -7.59%

Apache Corp. (APA) $21.94 -7.27%

Hewlett Packard Enterprise (HPE) $24.55 -7.05%

Celanese Corp. (CE) $39.40 -6.92%

Ipg Photonics Corp. (IPGP) $80.68 -6.91%

Albemarle Corp. (ALB) $90.16 -6.88%

Nasdaq 100 - Risers

O'Reilly Automotive Inc. (ORLY) $102.15 2.44%

Monster Beverage Corp (MNST) $69.62 0.85%

Verisk Analytics Inc. (VRSK) $243.06 0.74%

Kraft Heinz Co. (KHC) $25.15 0.44%

Gilead Sciences Inc. (GILD) $117.18 0.38%

Paychex Inc. (PAYX) $125.55 0.27%

Vodafone Group Plc ADS (VOD) $11.30 0.18%

Walgreens Boots Alliance, Inc. (WBA) $11.98 0.00%

Mondelez International Inc. (MDLZ) $61.88 0.00%

Alexion Pharmaceuticals Inc. (ALXN) $0.00 0.00%

Nasdaq 100 - Fallers

Synopsys Inc. (SNPS) $438.92 -9.39%

Baidu Inc. (BIDU) $121.69 -8.09%

Paypal Holdings Inc (PYPL) $69.84 -7.80%

Lam Research Corp. (LRCX) $131.37 -6.83%

JD.com, Inc. (JD) $31.85 -6.24%

Mercadolibre Inc. (MELI) $2,133.67 -6.21%

Micron Technology Inc. (MU) $181.60 -5.58%

Analog Devices Inc. (ADI) $225.32 -5.28%

Tesla Inc (TSLA) $413.49 -5.06%

Amazon.Com Inc. (AMZN) $216.37 -4.99%