Trump tariffs: Wall Street’s one-month long calm ended on Friday. US stocks suffered their biggest decline in six months after President Donald Trump threatened “a huge increase in tariffs on Chinese products” coming to the US. Its weekly gain ended after the S&P 500 index fell 2.7 percent. October 10 was its worst day since April 10. The selloff due to tariff tension shook the financial markets yesterday.
The Nasdaq 100 index fell 3.5 percent yesterday. Shares of Magnificent Seven companies saw a decline of 3.8%. In this, shares of Tesla Inc. and Amazon.com Inc. fell the most. While Nvidia Corp fell by about 5%.
Wall Street’s main fear index, the CBO Volatility Index, or VIX, rose above 20 for the first time since April. This is a level that is usually a sign of increasing tension in the market.
Trump recently cited “hostile” export controls on rare earth minerals and said there is “no reason” to meet with Chinese President Xi Jinping in this environment. Due to this, the fear of increasing trade war between China and America has increased. Due to this, investors were seen moving away from risky investment options. Trump further said that America can make a huge increase in the tariffs imposed on Chinese products. Apart from this, many other methods can also be adopted against China.
Wall Street fell sharply due to rising tensions between the world’s two largest economies. More than 420 stocks of the S&P 500 index declined (84%). A decline was seen in 10 out of 11 sectors of the S&P 500. The reason for this was the decline in technology stocks. On the other hand, Consumer Staples, considered defensive, was the only index to gain. PepsiCo Inc., included in this sector, was the best performing stock in the S&P 500. An increase of 3.7 percent was seen in this.