Wall Street tumbles to its worst day since April after Trump threatens
more tariffs on China
[October 11, 2025]
By STAN CHOE
NEW YORK (AP) — A monthslong calm on Wall Street shattered Friday, and
U.S. stocks tumbled after President Donald Trump threatened to crank
tariffs much higher on China.
The S&P 500 sank 2.7% in its worst day since April. The Dow Jones
Industrial Average dropped 878 points, or 1.9%, and the Nasdaq composite
fell 3.6%.
Stocks had been heading for a slight gain in the morning, until Trump
took to his social media platform and said he’s considering “a massive
increase of tariffs” on Chinese imports. He’s upset at restrictions
China has placed on exports of its rare earths, which are materials that
are critical for the manufacturing of everything from consumer
electronics to jet engines.
“We have been contacted by other Countries who are extremely angry at
this great Trade hostility, which came out of nowhere,” Trump wrote on
Truth Social. He also said “now there seems to be no reason” to meet
with China’s leader, Xi Jinping, after earlier agreeing to do so as part
of an upcoming trip to South Korea.
The ratchet higher in tensions between the world’s largest economies led
to widespread drops across Wall Street, with roughly six out of every
seven stocks within the S&P 500 falling. Nearly everything weakened,
from Big Tech companies like Nvidia and Apple to stocks of smaller
companies looking to get past uncertainty about tariffs and trade.
The market may have been primed for a slide. U.S. stocks were already
facing criticism that their prices had shot too high following the S&P
500’s nearly relentless 35% run from a low in April. The index, which
dictates the movements for many 401(k) accounts, is still near its
all-time high set earlier in the week.
Critics say the market looks too expensive after prices rose much faster
than corporate profits. Worries are particularly high about companies in
the artificial-intelligence industry, where pessimists see echoes of the
2000 dot-com bubble that imploded. For stocks to look less expensive,
either their prices need to fall, or companies’ profits need to rise.
Levi Strauss dropped 12.6% for one of the market’s larger losses, even
though it reported a stronger profit for the latest quarter than
analysts expected.
Its forecast for profit over the full year was also within range of Wall
Street’s estimates, but the jeans and clothing company could simply be
facing the challenge of heightened expectations after a big run. Its
stock price came into the day with a surge of nearly 42% for the year so
far.
All told, the S&P 500 fell 182.60 points to 6,552.51. The Dow Jones
Industrial Average dropped 878.82 to 45,479.60, and the Nasdaq composite
sank 820.20 to 22,204.43.
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A trader looks at financial information on his computer on the floor
at the New York Stock Exchange in New York, Wednesday, Oct. 1, 2025.
(AP Photo/Seth Wenig)
 Some of Friday’s strongest action
was in the oil market, where the price of a barrel of benchmark U.S.
crude sank 4.2% to $58.90.
It fell as a ceasefire between Israel and Hamas came into effect in
Gaza. An end to the war could remove worries about disruptions to
oil supplies, which had kept crude’s price higher than it otherwise
would have been.
Losses accelerated following Trump’s tariff threat, which could gum
up global trade and lead the economy to burn less fuel. Brent crude,
the international standard, dropped 3.8% to $62.73 per barrel.
In the bond market, the yield on the 10-year Treasury sank to 4.05%
from 4.14% late Thursday.
It had already been lower before Trump made his threats, as a report
from the University of Michigan suggested that sentiment among U.S.
consumers remains in the doldrums.
“Pocketbook issues like high prices and weakening job prospects
remain at the forefront of consumers’ minds,” according to Joanne
Hsu, director of the Surveys of Consumers. “At this time, consumers
do not expect meaningful improvement in these factors.”
The job market has slowed so much that the Federal Reserve cut its
main interest rate last month for the first time this year. Fed
officials have penciled in more cuts through next year to give the
economy additional breathing room. But Chair Jerome Powell has also
said they may change course if inflation stays high. That’s because
lower interest rates can push inflation even higher.
One potentially encouraging signal from the University of Michigan’s
preliminary survey said consumers’ expectations for inflation in the
coming year edged down to 4.6% from 4.7% the month before. While
that’s still high, the direction of change could help the Fed and
limit upward pressure on inflation.
In stock markets abroad, indexes fell across much of Europe and
Asia.
Hong Kong’s Hang Seng fell 1.7%, and France’s CAC 40 dropped 1.5%
for two of the bigger moves. But South Korea’s Kospi leaped 1.7%
after trading reopened following a holiday.
___
AP Writer Teresa Cerojano contributed.
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