The Dow Jones Industrial Average plunged nearly 900 points on Friday, with markets completely reversing after former President Donald Trump accused China of acting “extremely hostile” in ramping up exports of rare earth metals and threatened to impose new tariffs on Chinese goods.
Selling accelerated towards the closing price. The S&P 500 lost more than $1.5 trillion in value. Traders bailed out. My portfolio bled.
The Dow Jones Industrial Average ended the day down 878.82 points, or 1.9%, at 45,479.60. The S&P 500 fell 2.71% to 6,552.51 and the Nasdaq fell 3.56% to 22,204.43. The S&P’s decline was its worst since April 10th. Earlier in the day, the Nasdaq had hit an intraday high until the threat of tariffs blew it away.
President Trump cancels APEC meeting, hints at ‘massive’ tariff hike
In a post on Truth Social, President Trump said there was “no reason” to meet with President Xi Jinping at the APEC summit in South Korea, adding: “One of the policies we are considering at this time is a significant increase in tariffs on Chinese goods coming into the United States.”
His move comes as China tightens rare earth export controls, requiring any cargo containing more than 0.1% rare earths to be approved by the Chinese government. President Trump called this a global hostage situation and said China was holding the world “captive” using its mineral dominance as a weapon.
That’s all you need. The market was in complete panic.
The names of technologies with deep ties to China were chopped up. Nvidia is down nearly 5%, AMD is down 8% and Tesla is down 5%. Oil prices also fell, with U.S. oil prices falling as traders worried that prolonged tariffs would slow global demand.
Bitcoin plummets to $116,000, virtual currency disappears
It wasn’t just stocks. Cryptocurrency has also been buried. According to CoinGlass, $1.28 billion worth of cryptocurrency positions were liquidated in the past 24 hours. It was a chain reaction. Bitcoin plummeted as soon as President Trump announced “massive tariffs.”
Bitcoin fell from more than $122,000 in the morning to about $116,200 on the day, a drop of nearly 4%. Ethereum fell about 8% to $3,975, while Solana fell more than 7% to $205, according to data from CoinGecko. By Friday afternoon, all three tokens had reached October lows.
This price action effectively erased Bitcoin’s entire October rally. The crypto crowd was in a frenzy after Bitcoin rose 10.5% to hit an all-time high of $126,000 earlier this month. It’s gone. Traders are now back to levels last seen on October 1st.
Wall Street’s fear gauge, the CBOE Volatility Index (VIX), soared above 22. This ended four months of steady gains for the S&P 500 index as options traders rushed to buy downside protection. In short, it was an all-out panic hedge.
Oracle outlook rises despite 10% drop
Meanwhile, Oracle received a surprise vote of confidence from Citi, even as the broader AI industry slumps. Analyst Tyler Radke raised his price target to $415 from $395, predicting an upside of nearly 40%. He maintained his buy rating.
Radke acknowledged the recent pullback, noting that Oracle shares have fallen 10% in the last month amid a flurry of headlines questioning the company’s AI strategy and concerns about the quality of its backlog and profitability. However, he wrote that demand for AI infrastructure remains strong within Oracle’s cloud business.
“After a historic first quarter, ORCL stock has fallen more than 10% from its recent highs due to concerns about the quality of its backlog, much-publicized profitability concerns, and broader AI bubble/circularity concerns,” he said. He called the drop a buying opportunity and predicted that Oracle’s outlook through fiscal 2028 “could be subject to significant upward revisions.”
He also pointed to strong growth in Oracle Cloud Infrastructure (OCI) reservations. He claimed that this effort is being driven by top AI clients. He also dismissed concerns about recovery point targets, calling them “overdone.”
Radke expects Oracle to clarify the capital expenditures, capital needs, and long-term profitability metrics associated with these growing AI projects. In his view, this could stabilize profit margins and drive future earnings. Whether investors agree next week is another story.
The Dow had an ugly close. The S&P500 fell. Cryptocurrency holders have been hit hard. It was a disaster caused by a few posts, policy teasing, and a growing sense that the US-China trade war is not over yet. Not even close.
