"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."
"Trump's sudden announcement of new tariffs recalled April's big swoon in stock markets, when the president announced "Liberation Day" with a list of "reciprocal tariffs" for a large number of countries worldwide, sending global markets plunging. Within just four days, the S&P 500 fell about 12% and the Dow Jones Industrial Average lost nearly 4,600 points, but the U.S. indexes regained all the lost ground within a month or so as the tariffs played out very differently from Trump's announcement."
Stocks fell sharply after President Trump signaled consideration of "a massive increase of tariffs" on Chinese imports, driving the S&P 500 down 2.7%, the Dow down 1.9% and the Nasdaq down 3.6%. The proposed tariffs were framed as retaliation for China's restrictions on rare earth exports, critical for manufacturing electronics and jet engines. Trump said other countries were "extremely angry" about sudden trade hostility and suggested there was "no reason" to meet Xi Jinping. Markets recalled an April tariffs-driven swoon that erased significant value before indexes recovered. Fed Governor Chris Waller noted tariffs raised prices for wealthier consumers while many companies absorbed costs for price-sensitive shoppers; Moody's found nearly half of consumer spending comes from the top 10%, and tariff revenue was described as very significant.
Read at Fortune
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