Traders work during the Alliance Laundry Holdings Inc. initial public offering (IPO) on the floor of the New York Stock Exchange (NYSE) in New York, US, on Thursday, Oct. 9, 2025.
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Stocks moved decidedly lower in a rapid move Friday after President Donald Trump made some critical comments about China regarding their controls on global rare earth metal resources, triggering worries trade relations may worsen again between the two countries.
The S&P 500 lost 1.1% following the Trump comments and the Nasdaq Composite fell 1.7%. The Dow Jones Industrial average was down 342 points. At its low, the Dow was off more than 339 points following the Trump comments.
Trump posted on Truth Social that China was “becoming very hostile, and sending letters to Countries throughout the world, that they want to impose export controls on each and every element of production having to do with rare earths.”
“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,” Trump added.
Trump accused China of holding the globe “captive” using its rare earths metals resources and said that he would be forced to “financially counter their move.”
Earlier this week China tightened their control on the market, which is key to technologies used in electric vehicles and missile defense, requiring foreign entities to get a license from Beijing to export anything that contains rare earths worth 0.1% or more of the value of the goods.
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Shares of tech stocks with the most to lose from souring trade relations with Chine led the rapid sell-off Friday. Nvidia and Broadcom each lost around 2% each. AMD dropped 7%. Tesla shed 2%.
The setback with China came as the U.S. government shutdown dragged into its 10th day on Friday, adding to the bearish sentiment to close out the week. The Senate failed for a seventh time Thursday to pass dueling stop-gap funding proposals that would have put an end to the stoppage. At this point, there have been no signs that Republicans and Democrats have made meaningful progress on negotiations.
Friday’s declines wiped out the S&P 500’s gain for the week. The benchmark was now on track to lose 1% for the week. Earnings season is set to begin in earnest next week, with several banks such as Citigroup and JPMorgan slated to post their third-quarter results.