Stocks sink as US-China trade war heats up, Trump threatens action

The US-China trade dispute erupted on Friday, sending US stocks higher, with the three major averages closing sharply lower, marking the worst session since April.

The Dow Jones Industrial Average fell about 900 points, while the Nasdaq fell by 3.5% and the S&P 500 fell by 2.7%. However, all three major indexes touched new highs earlier this week.

The New York Stock Exchange and Nasdaq will operate normal business hours on Monday, the Columbus Day holiday, while the bond market will be closed.

Trump is “angry” with China

Sources tell FOX Business’ Edward Lawrence that President Donald Trump is “furious” after a briefing about China’s new announcement of export controls. Now, the meeting between Trump and Chinese President Xi Jinping, which was scheduled to take place in South Korea in two weeks, is likely to be cancelled.

“I was supposed to meet President Xi in two weeks, at the Asia-Pacific Economic Cooperation (APEC) forum in South Korea, but now it seems there is no reason to do so,” he said on Truth Social.

Trump threatens China to cancel tariffs

Trump also said he would have to confront the Chinese move financially. The source said that large customs duties may be on the table.

On Friday, after the close of trading, Trump laid out his plan in a post on Truth Social.

“Based on the fact that China has taken this unprecedented position, and speaking only on behalf of the United States, and not other countries under a similar threat, starting on November 1, 2025 (or earlier, depending on any other actions or changes China takes), the United States of America will impose a 100% tariff on China, in addition to any tariffs it currently pays. Also on November 1, we will impose export controls on any and all software The task” is a detailed part of the publication.

The majority of the S&P’s large-cap sectors fell, led by technology, energy and consumer discretionary, while utilities and consumer staples bucked the selloff.

Broad selling is hitting most S&P sectors

Magnificent Seven shares saw significant declines, led by Amazon, Meta, Nvidia, and Tesla.

“This is all a high-stakes poker game taking place between the U.S. and China in this AI revolution, as we also see more scrutiny in Beijing over Nvidia’s gold chips,” Wedbush Securities analyst Dan Ives said in a research note to clients.

“We view these moments as buying opportunities to own the semi-final winners, software, big tech companies, and the future of AI, as we see these tensions not escalating into a more tense time compared to the nervous period we saw in April.”

Investors have used the sell-off to snap up more defensive names, including McDonald’s, Coca-Cola and Pepsi.

ETF Report: News and Analysis

Gold and silver hit record highs

The price of gold, a flight to safety, rose to more than $4,000, setting a new record. The yellow metal has risen by about 50% this year and is among the best-performing asset classes. Silver also reached a new high of $50 on Thursday and is just below that level as of midday Friday.

Gold prices hit a new record high above $4,000 this week. (Getty Images/Getty Images)

Investors were buying exchange-traded funds that track precious metals on Friday, including the SPDR Gold Trust, the largest fund backed by physical gold, and ProShares Ultra Silver.

Wealthy investors are turning to ETFs to get their hands on three hot assets

Oil falls below $60 per barrel

Trade war woes also affected oil prices, which fell below $60 per barrel. US Oil ETFs and the US Oil Fund fell sharply.

Energy giants Exxon Mobil, Chevron and ConocoPhillips fell in tandem.

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