"Stocks had been heading for a slight gain in the morning, until Trump took to his social media platform and said he's considering "a massive increase of tariffs" on Chinese imports. He's upset at restrictions China has placed on exports of its rare earths, which are materials that are critical for the manufacturing of everything from consumer electronics to jet engines."
""We have been contacted by other Countries who are extremely angry at this great Trade hostility, which came out of nowhere," Trump wrote on Truth Social. He also said "now there seems to be no reason" to meet with China's leader, Xi Jinping, after earlier agreeing to do so as part of an upcoming trip to South Korea. A trader looks at financial information on his computer on the floor at the New York Stock Exchange in New York, Wednesday, Oct. 1, 2025."
"The market may have been primed for a slide. U.S. stocks were already facing criticism that their prices had shot too high following the S&P 500's nearly relentless 35% run from a low in April. The index, which dictates the movements for many 401(k) accounts, is still near its all-time high set earlier in the week. Critics say the market looks too expensive after prices rose much faster than corporate profits."
President Donald Trump's threat to impose a massive increase in tariffs on Chinese imports after China restricted rare earth exports triggered a sharp market selloff. The S&P 500 plunged 2.7%, the Dow fell 878 points (1.9%), and the Nasdaq dropped 3.6%, with roughly six of every seven S&P 500 stocks declining. Big Tech names including Nvidia and Apple fell alongside smaller companies facing tariff uncertainty. Stocks had rallied about 35% since April and remained near an all-time high, amplifying concerns that prices outpaced corporate profits and that markets were vulnerable to a shock.
Read at ABC7 Los Angeles
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