President Donald Trump just dropped a bombshell on social media that sent Wall Street into a tailspin, erasing a staggering $2 trillion in market value in a single day, as CNBC reports.
On Friday morning, October 10, 2025, a single post from Trump on Truth Social, threatening a hefty hike in tariffs on Chinese goods, triggered a massive sell-off across major U.S. stock indices, with the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average all taking brutal hits.
Before the chaos erupted, the S&P 500 was flirting with an all-time high, and the Nasdaq had even touched its own peak earlier in the session. Then, at 10:57 a.m. ET, Trump accused China of holding the world “captive” with a “monopoly” on rare earth metals, critical for everything from semiconductors to electric vehicles.
In his post, Trump didn’t mince words, warning of a “massive increase of tariffs on Chinese products coming into the United States of America,” as he stated on Truth Social. Now, let’s be real—China’s grip on rare earths, controlling about 70% of global supply, is a genuine concern for national security and economic independence. But did this public threat have to tank the market on a day when optimism was running high?
By the closing bell, the damage was done: the S&P 500 plummeted 2.7%, its worst day since early April, while the Nasdaq cratered 3.56%, and the Dow shed 879 points, or 1.9%. Even the Russell 2000 small-cap index wasn’t spared, dropping 3%.
Tech giants bore the brunt of the beating, with Nvidia down 5%, AMD sinking nearly 8%, Apple off 3%, and Tesla losing 5%. The sell-off was relentless—424 of the S&P 500’s members closed in the red, and even domestic financials like Bank of America and Wells Fargo each shed over 2%.
The market had been banking on smoother U.S.-China trade relations, especially with Trump and Chinese leader Xi Jinping slated to meet at the Asia-Pacific Economic Cooperation summit later this month. Investors were already jittery after China tightened export controls on rare earths the night before Trump’s post, requiring licenses and case-by-case reviews for military applications.
Current tariffs on Chinese goods hover around 40%, a rate the market has grudgingly adapted to with exemptions for products like Apple’s iPhones. But a “massive increase,” as Trump put it, could choke an economy reliant on imported parts for cars, solar panels, and more.
Then there’s the specter of retaliation—China could slap back with tariffs on U.S. goods, potentially spiraling into a full-blown trade war. That’s a risk many investors aren’t willing to stomach, especially with contagion already spreading from the bankruptcy of auto parts supplier First Brands, which dragged Jefferies Financial Group down 4% on Friday and another 6% after hours.
Just when you thought the bleeding might stop, Trump doubled down after the closing bell, threatening 100% tariffs on China “over and above any tariff that they are currently paying,” with new duties to start in early November. He even hinted at export controls on critical software, a move that could hammer AI leaders like Nvidia.
Some market watchers, however, see a silver lining. “The good news is that this may just be another negotiating tactic used by the administration that could yield good results over the long term,” said Jay Woods, chief market strategist at Freedom Capital Markets, during Friday’s frenzy at the NYSE.
Woods also suggested, “The knee-jerk sell-off should be another buying opportunity.” That’s a bold take when hedge funds buying on margin might be forced to deleverage, adding selling pressure next week, and crypto markets—especially smaller coins like the TRUMP meme coin, down 20% in 24 hours—are already reeling.
Amid the wreckage, a few defensive stocks like Walmart and tobacco companies eked out small gains, proving that not everyone gets burned in a panic. Still, with the S&P 500 retreating to its lowest level in a month—though still up over 11% for the year—the broader mood is sour.
Trump’s posts also cast doubt on whether the planned summit talks with Xi Jinping will even happen, further unsettling a market that had enjoyed 33 straight days without a 1% move in the S&P 500 until this debacle. With stock futures set to open Sunday evening and the bond market closed Monday for Columbus Day, investors are bracing for more turbulence.
At the end of the day, Trump’s push to bolster domestic rare earth supplies through U.S. and Canadian companies is a smart long-term play—China’s stranglehold on these resources is a real problem. But the shock-and-awe tariff threats risk derailing an economy that’s already navigating choppy waters. If this is just a negotiating ploy, as some hope, let’s pray the collateral damage doesn’t bury Main Street before the deals are done.
