On Friday morning, U.S. stock markets were on the verge of reaching new all-time highs, with the S&P 500 just a couple of points away from another record. However, this optimism was abruptly shattered after a single social media post by President Donald Trump, which resulted in an astonishing $2 trillion being wiped off the market's value. The event underscored the immense influence that the president’s trade policies—and even his public statements—continue to have on the global economy.
**The Post That Shook the Markets**
At 10:57 a.m. Eastern Time, President Trump posted on his Truth Social platform, expressing concern about China’s behavior on the world stage, particularly its dominance over rare earth metals. He accused China of becoming “very hostile” and of holding the world “captive” due to its “monopoly” on these critical resources. Most significantly, Trump revealed that his administration was actively considering a “massive increase of tariffs on Chinese products coming into the United States of America.”
That single sentence was enough to spark a widespread market sell-off. According to Bespoke Investment Group, about $2 trillion in value evaporated from the U.S. stock market in the wake of the post. The S&P 500 closed the day down 2.7%, marking its worst single-day performance since early April, when markets had similarly tumbled following Trump’s announcement of higher tariffs on goods from around the world. The tech-heavy Nasdaq Composite, which had earlier touched an all-time high, dropped 3.56%—its worst showing since April as well. The Dow Jones Industrial Average fell by 879 points (1.9%), and the Russell 2000 small-cap index lost 3%.
**Market Expectations and Tariff Fatigue**
Until Friday’s dramatic reversal, investors had grown relatively comfortable with the ongoing U.S.-China trade dispute. Tariffs on Chinese imports were already hovering around 40%, but the consensus was that the U.S. economy was resilient enough to withstand the impact. Moreover, key exemptions—such as those for Apple’s iPhones—helped cushion the blow. Investors also held out hope that a resolution was in sight, with Trump and Chinese leader Xi Jinping scheduled to meet at the Asia-Pacific Economic Cooperation (APEC) summit later in the month.
The sudden threat of additional, even steeper tariffs, however, rattled that sense of stability. If implemented, many fear these new duties could be too much for U.S. manufacturers and consumers to bear, given the country’s ongoing reliance on imported parts for everything from automobiles to solar panels. Perhaps even more concerning was the possibility of retaliation from China, which could escalate the conflict into a full-blown trade war.
**The Rare Earths Factor**
China’s dominance in the rare earths market added another layer of tension. Just a day before Trump’s post, Beijing had announced new restrictions on the export of rare earth elements—materials essential for making semiconductors, electric vehicles, and advanced military technology. China controls about 70% of the global supply of these minerals and declared that foreign companies would need licenses to export products containing rare earths, especially if they had military applications. Each case would be reviewed individually.
The U.S. has been trying to reduce its dependence on Chinese rare earths, with Trump supporting domestic and Canadian mining efforts. Nonetheless, the threat of tighter Chinese control over these critical materials weighed heavily on markets—particularly on technology companies that rely on them for manufacturing.
**Tech and Broader Market Sell-Off**
The technology sector, which includes many firms deeply entwined with Chinese suppliers and customers, bore the brunt of Friday’s sell-off. Semiconductor giants Nvidia and AMD led the decline; Nvidia lost 5%, while AMD, a recent market leader, plummeted nearly 8%. Apple shares fell 3%, and Tesla dropped 5%. The sell-off wasn’t limited to tech or companies with direct exposure to China—broadly, 424 of the S&P 500’s members closed lower on the day.
Institutional investors, facing such a sudden and significant downturn, scrambled to reduce risk. As their technology holdings were hit, many were forced to sell other assets to raise cash, amplifying the downward momentum across sectors. Financial stocks like Bank of America and Wells Fargo both lost more than 2%. Only a handful of traditionally defensive stocks, such as Walmart and tobacco companies, managed to end the day in