IXIC: Nasdaq Post Biggest Drop Since April, Stocks Shed $1.6 Trillion. Tariff Wars Are So Back.

Trump said Friday he’s bringing back 100% tariffs on China after the Asian country expanded export controls on its rare earths.

🔥 Trump Brings Back the Heat

• Friday was a bad day to be a stock, in stocks, or even look at stocks. The Nasdaq Composite index IXIC wiped out 3.6%, its worst showing since the April tariff-fueled meltdown.
• Remember what caused that? The second quarter kicked off with huge selloffs after Trump said he’s slapping tariffs on China and every other big trading partner. Time for part two: the fourth quarter kicked off in the same vibe.
• Trump said Friday he’s canceling a planned meeting with Chinese President Xi and is introducing 100% tariffs on Chinese goods. Just when traders and investors thought the trade wars were over… they’re suddenly so back.

⚠️ China Tightens the Screws

• The Dow Jones Industrial Average DJI plunged roughly 900 points, or close to 2%, and the S&P 500 (SPX) wiped out 2.7%. All three major indexes gave back their weekly increases and then some.
• For better or worse, Trump’s 100% tariff threat, effective November 1, came after the market close. So the reaction you see on the charts was triggered from a Trump post, saying he’s considering “massive” tariffs.
• The renewed trade tension came after China announced it would tighten controls on exports of some rare-earth materials that are used in EV manufacturing and high-tech products. In addition, Trump said he’ll restrict exports on critical software products.

💥 Bitcoin Falls, Gold Gains

• Even without the actual tariff rate factored in, US stocks erased $1.6 trillion for the session. Who knows what will happen when futures markets open late Sunday? Lots of traders don’t want to see that.
• Other reactions across the board: Bitcoin BTCUSD takes no days off, so crypto traders digested the tariff hike with a complete lack of buying appetite. The orange coin plunged 7.2% on Friday and extended its decline early Saturday to touch levels under $111,000.
• The US dollar also pulled back with the EURUSD reversing a four-day drop to close Friday up 0.5% to $1.1620. Safe-haven demand picked up, sending gold prices higher by a full 1% to $4,016 per ounce.
• Adding to the mix of uncertainty, the US government shutdown continues to keep traders in the dark with no economic data getting out.