Global stock markets fell on Friday after U.S. President Donald Trump threatened to impose “massive” tariffs on China. Trump criticized China’s trade practices, citing new export controls on rare‑earth technologies, and said other countermeasures were being considered. He added that a meeting with Chinese President Xi Jinping later this month was no longer necessary. The remarks sparked a sharp decline on Wall Street, with the Nasdaq dropping 2 % in late‑morning trading, and the dollar weakening against its main rival currencies.
Tensions between Washington and Beijing had been easing after a tit‑for‑tat tariffs war earlier this year, and the Trump‑Xi meeting was expected to help sustain a fragile truce. However, China’s announcement on Thursday of additional controls on rare‑earth exports added new regulatory pressure to an industry that has long been a source of friction between the two countries.
Oil prices also retreated as the Gaza ceasefire took effect, easing fears of a broader regional conflict that could disrupt supply. The U.S. benchmark WTI fell below $60 a barrel, and both WTI and Brent declined more than 3 % after Trump’s comments, which threatened to slow trade and economic activity. European markets followed suit, with Paris ending the day down 1.5 % as French President Emmanuel Macron prepared to appoint a new head of government.
The week had previously seen a series of record highs: the tech‑heavy Nasdaq, the Frankfurt stock exchange, and gold prices all reached new peaks, while silver surged to a decades‑long high. Investor optimism had been buoyed by spending on artificial intelligence, including multi‑billion‑dollar chip deals signed by ChatGPT‑maker OpenAI with U.S. firm AMD and South Korean firms Samsung and SK Hynix. Yet concerns that the rally could lose momentum have sparked jitters on trading floors, and the debate over an AI bubble remains heated—some view it as a new internet‑style bubble poised to burst, while others see further room for growth.
As of 15:30 GMT, major indices showed significant declines: the Dow, S&P 500, and Nasdaq Composite all fell sharply. The euro and pound rose against the dollar, which slipped against the yen, and Brent, North Sea crude, and West Texas Intermediate oil prices all dropped. These developments underscore the ongoing trade tensions between the United States and China and illustrate how geopolitical events continue to shape global markets. Investors will be watching closely for the next steps in the trade dispute and their impact on the world economy.
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