Dow plunges 500 points after Trump blasts ‘hostile' China, threatens ‘massive' tariffs

Market Reaction - US stocks experienced a significant decline, with the Dow Jones Industrial Average dropping 518 points (1.1%), the S&P 500 falling 1.3%, and the Nasdaq decreasing by 1.8% following President Trump's tariff threat against China [1][8] - The S&P 500's decline erased its weekly gains, indicating a potential loss of 1% for the week [8] Trade Tensions - President Trump accused China of becoming "very hostile" due to its rare earth restrictions and threatened a "massive increase" in tariffs [1][4] - The cancellation of a planned meeting between Trump and Chinese President Xi Jinping heightened investor fears regarding escalating trade tensions [2][11] Rare Earths Market - Rare earth minerals, crucial for energy infrastructure and defense technologies, have become a focal point in US-China trade relations [4] - US rare earth stocks surged as investors anticipated a need for increased domestic supply, with companies like MP Materials and USA Rare Earth seeing jumps of 14.2% and 14.8%, respectively [11] Impact on Tech Stocks - Tech companies heavily reliant on China, such as Nvidia, AMD, and Tesla, led the sell-off, with their shares dropping 1.7%, 5.7%, and 2.9% respectively [8] - Chinese stocks also plummeted, with Alibaba and Baidu falling 10.4% and 6.6%, respectively, indicating a broader market reaction to the trade tensions [12]