Stocks moved decidedly lower in a rapid move on Friday after President Donald Trump threatened higher tariffs on China, accusing the country of “becoming very hostile” with its restrictions on rare earth metals, a key resource for the tech and defense industries.
The Dow Jones Industrial Index cratered 878.82 points, or 1.9%, to close the week at 45,479.60.
The S&P 500 index sank 182.61 points, or 2.7%, to 6,552.50
The tech-heavy NASDAQ stumbled 820.20 points, or 3.6%, to 22,204.43
Prior to Trump’s comments, stocks were sizably higher, with the NASDAQ hitting a new all-time intraday high.
Shares of tech stocks with the most to lose from souring trade relations with China led the rapid sell-off Friday. Nvidia lost more than 3%, while AMD dropped more than 6% and Tesla shed more than 4%. Meanwhile, U.S. crude oil fell as investors grew increasingly concerned that higher tariffs might ultimately weigh on demand.
Friday’s declines wiped out the S&P 500's gain for the week. The benchmark was now on track to lose more than 1% for the period. The NASDAQ and the Dow were also pacing for a weekly loss of more than 1% and more than 2%, respectively.
The U.S. government shutdown dragged into its 10th day on Friday, a day after the Senate failed for a seventh time to pass dueling stop-gap funding proposals that would have put an end to the stoppage.
At this point, there have been no signs that Republicans and Democrats have made meaningful progress on negotiations.
With the stalemate continuing, investors are struggling to find catalysts due to a lack of economic data from the government. However, the latest data from the University of Michigan showed that both the U.S. economy and the consumer are holding up.
Also offering some sense of consumer demand, earnings reports on Thursday from companies like Delta Air Lines and PepsiCo were positive, even though they weren’t enough to sustain a rally in stocks that day.
Still, the S&P 500 could eked out gains of 0.5% and the NASDAQ could point a weekly rise of and more than 1%. The 30-stock Dow, however, is pacing for a 0.5% drop.
Earnings season is set to begin in earnest next week, with several banks such as Citigroup and JPMorgan slated to post their third-quarter results.
Prices for the 10-year Treasury took off Friday, lowering yields to 4.06% from Thursday’s 4.14%. Treasury prices and yields move in opposite directions.
Oil prices deleted $2.59 to $58.92 U.S. a barrel.
Gold prices jumped $59.40 to $4,032.22 U.S. an ounce.
