The S&P 500 fell 2.7%, marking its worst day since April, after President Donald Trump declared he would impose 100% tariffs on imports from China.
The Dow Jones Industrial Average dropped 878 points, or 1.9%, while the Nasdaq slid 3.6%. Analysts predict further declines in the next trading session due to the confirmed implementation of the tariffs.
Shares had opened slightly higher but quickly reversed course after Trump wrote that he was considering a "massive tariff increase" on Chinese imports. He later confirmed, "I will impose 100% tariffs on China."
Trump expressed anger over China's decision to limit exports of rare earths, which are essential for high-tech manufacturing and defense systems. In a sign of escalating tensions, Chinese authorities also announced an investigation into US chipmaker Qualcomm, following its acquisition of Israeli automotive tech firm Autotalks. The probe will examine whether the deal violates Chinese antitrust laws.
"Many countries have reached out to us expressing frustration over this sudden escalation in trade hostility," Trump said. He also stated there was "now no reason" to meet with Chinese President Xi Jinping during his upcoming visit to South Korea, despite previously agreeing to the summit.
The intensifying standoff between the world's two largest economies sent shockwaves through nearly every sector, with six out of every seven companies listed on the S&P 500 losing value. Tech giants such as Apple and Nvidia were hit particularly hard, along with smaller firms that rely heavily on stable global trade.
