New York stocks plunged across the board. As U.S. President Donald Trump hinted that a summit with Chinese President Xi Jinping had fallen through and warned of imposing high tariffs on China, investor sentiment froze late in the session.
According to the New York Stock Exchange (NYSE) on the 10th (local time), the Dow Jones Industrial Average ended down 878.82 points (1.90%) at 45,479.60. The Standard & Poor's (S&P) 500 index fell 182.60 points (2.71%) to 6,552.51, and the Nasdaq composite plunged 82.20 points (3.56%) to 22,204.43. In particular, the Nasdaq's drop was the largest since 4.31% on 4/10, when uncertainty over Trump's reciprocal tariff stance was at its peak.
CNBC said, "Before President Trump's remarks, the Nasdaq hit an intraday record high. But after Trump's comments, investor sentiment cooled rapidly," adding, "On a weekly basis, the S&P 500 erased this week's gains, and the Nasdaq and Dow Jones fell in the 1% and 2% ranges, respectively."
That day, President Trump expressed displeasure at China's strong export controls on rare earths and other measures to check the United States. Through Truth Social, he said, "I was originally scheduled to meet Xi at the Asia-Pacific Economic Cooperation (APEC) summit to be held in Korea in two weeks, but now it doesn't seem there is any reason to do so," adding, "Depending on what position they take on China's newly issued hostile 'order,' I will have no choice as president of the United States but to respond to their actions financially."
Trump also said he is seriously considering a large tariff increase on Chinese products and is discussing several response measures in depth. This appears to be in response to the Chinese government's check on the United States.
The day before, the Chinese government announced measures to check the United States. In addition to separately imposing port entry fees on U.S. vessels, it plans to conduct an antitrust review of U.S. semiconductor corporations Qualcomm regarding its acquisition of automotive chip design firm Autotalks.
It also changed policy to require an export license for dual-use goods issued by the Chinese government when exporting certain rare earths. As a result, materials for rare-earth permanent magnets and rare-earth target materials manufactured overseas, as well as products produced overseas using technology to mine, smelt, and separate rare earths originating from China, were also made subject to export controls.
With investor sentiment weakening in this situation, technology stocks that had seen big gains suffered large declines. Nvidia plunged 4.91%. Amazon, Broadcom, and Tesla fell 4.99%, 5.91%, and 5.06%, respectively. Microsoft (-2.195), Apple (-3.45%), Alphabet (-1.95%), and Meta (-3.85%) were all lower.
In particular, the Philadelphia Semiconductor Index, composed of the artificial intelligence (AI) and semiconductor theme that led this year's market, also plunged 6.32%. The last time this index fell more than 6% was 4/10 this year, when it dropped as much as 7.97%. Art Hogan, chief market strategist at B. Riley Wealth, said, "It's no surprise that tech stocks fell the most today," adding, "They have been significantly exposed to China in terms of manufacturing and large customers."
U.S. Government Bonds yields also tumbled (prices surged). As U.S.-China tensions flared again, investors appeared to be rushing into safe assets. The 10-year Treasury yield fell 8.8 basis points to 4.064% (1 bp = 0.01 percentage point), and the 2-year yield was down 7.1 bps at 3.529%.
Oil prices also fell more than 4%. November West Texas Intermediate (WTI) on the New York Mercantile Exchange dropped $2.61 (4.24%) to $58.90 a barrel in transactions from the previous session. On the London ICE exchange, December Brent crude fell $2.49 (3.82%) to $62.73 a barrel in transactions. Both benchmarks were at their lowest since early May.