Trump shakes the market again

Sudden sell-off in the stock market

On Friday morning, the S&P 500 was just a few points away from a new all-time high. Then, after a single social media post by President Donald Trump, market value fell by about $2 trillion.

This situation demonstrates the influence that the president's one-person trade policy still has on the fate of the global economy.

Trump wrote on his Truth Social platform at 10:57 a.m. ET (17:57 Moldova time) that China is “becoming very hostile” toward the rest of the world, especially regarding control over rare earth metal deposits. He accused China of holding the world “captive” because of its “monopoly” over these crucial resources.

The key part of Trump's 500-word post that the stock market reacted to was the following: “One of the policies we are considering at this moment is a massive increase in tariffs on Chinese products entering the United States of America.”

That was all it took...

The S&P 500 and Nasdaq recorded their worst day since April on Friday.

What triggered Trump's threat?

China, which controls about 70% of the global supply of rare earth metals, previously stated that external entities must obtain licenses to export any goods that use or contain its rare earth resources and that firms using these minerals for military purposes will be refused.

China intensified trade tensions with the United States by adding new port fees for American ships and launching an antitrust investigation into Qualcomm (QCOM). Beijing has also recently halted purchases of soybeans from the United States.

Crypto market reaction

The cryptocurrency market also recorded a sharp decline following Donald Trump's statements about China.

Yesterday, the total market capitalization of the crypto market fell to $3.7 trillion, compared with an all-time high of $4 trillion last week. Trading volume is currently $250 billion, according to CoinMarketCap data.

More than $19 billion in trades were wiped out, with over 1.6 million traders facing liquidation, according to Coinglass data. Remarkably, nearly $7 billion of these positions were cleared in just one hour of Friday trading. Open interest among traders fell by 18%. Analysts believe this was the result of a mix of macroeconomic shock and extreme leverage, marking the worst day for crypto since the first quarter of 2025.

How long can this massive sell-off last?

Today could be another difficult day for markets, because after the trading session closed, Trump continued his post, saying he would impose 100% tariffs on China “over and above any tariff that they are currently paying.”

Trump added that the United States would impose export controls on “any critical software,” which could have a significant impact on artificial intelligence leaders such as Nvidia. The new tariffs are expected to begin early next month, around the summit where Trump was supposed to meet Xi. Trump's Friday post suggested that those talks may now not take place.

Still, some traders and investors believe it would be wise to wait and see whether Trump fully follows through on his threat. Most of the strict tariffs threatened in early April were later significantly reduced through negotiations and exemptions, setting the stage for a powerful market recovery to new highs. Many investors believe it could happen again.

It did not take long and...

On Sunday, Trump appeared to suggest that he may not follow through on the tariff threat, posting on Truth Social: “Don't worry about China.” As a result, the U.S. market and the crypto market are recovering much of Friday's losses today.