“I was to meet President Xi in two weeks, at APEC, in South Korea, but now there seems to be no reason to do so,” said Trump in a post on Truth Social. “One of the policies that we are calculating at this moment is a massive increase of tariffs on Chinese products coming into the United States of America.”
The markets may see a further reaction on Monday as Trump has now threatened a 100% retaliatory tariff on China, effective from November 1. The announcement was made after market closing.“Expectations for a China trade deal just got swept off the table,” said Jeff Kilburg, founder of KKM Financial. “Profit takers are out in full force.”
The news just provided a trigger for the US markets to fall after a record-breaking run, sent the S&P 500 soaring to nearly 40% above the lows it made in April this year. The CBOE Vix, Wall Street’s fear gauge also moved above levels of 22 for the first time in four months.
Big tech shares, from Tesla to Nvidia and AMD were the most hit, declining between 5% to 8%. The US Government shutdown entering its 10th day also added to the uncertainties, as the senate failed for the seventh time to pass a stop-gap funding proposal.
Friday’s crash wiped out all the gains for the benchmark indices. The S&P 500, Dow Jones and Nasdaq ended the week with losses of 2.5%, 2.4% and 2.7% respectively.
