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Trump announces a 100% tariff increase on China after stocks and the dollar plummet.

The S&P 500, Nasdaq and Treasury yields all fell on Friday as President Donald Trump's comments reignited fears of a U.S. - China trade war.

Trump announced after the markets closed Friday that he would raise tariffs on Chinese imports to 100%, and place export controls on all "critical software". This was a response to China's recent announcement of export restrictions on rare earth minerals vital to manufacturing and tech.

The announcement came after a Trump post on social media that indicated new tariffs would be imposed against Chinese products, and threatened to cancel a scheduled meeting with President Xi Jinping.

The news caused a market panic, as investors worried about the impact of the trade war on the U.S. economic system. Trump's "Liberation Day", April 2, tariff announcement triggered some of the worst market volatility for years.

The day's Wall Street tumble was led by shares related to technology. The S&P 500 Technology index fell 4% and an index of semiconductors declined 6.3%. U.S. listed shares of Chinese companies also fell. Alibaba Group Holding and JD.com Inc both finished lower by 8.4%. After the bell, shares continued to decline.

Oil prices dropped more than $2 per barrel, as trade concerns cast a shadow on the outlook for demand. Spot gold rose back above $4,000 per ounce.

Robert Pavlik is a senior portfolio manager with Dakota Wealth, Fairfield, Connecticut. He said, "He caught the market by surprise again and has thrown more questions into a market which is already being questioned over its high level of enthusiasm, and for being too fluff-filled."

The Dow Jones Industrial Average closed down 878.82, or 1.99%, at 45479.60. The S&P 500 dropped 182.60 points or 2.71% at 6,552.51, and the Nasdaq composite was down 820.20, or 3.56 %, at 22,204.43.

The U.S. Stock Indexes hit new highs this week due to expectations for further Federal Reserve interest rate reductions and optimism regarding artificial intelligence deals.

The S&P 500 registered its largest weekly percentage drop since May.

The MSCI index of global stocks fell by 20.96 points or 2.11% to 972.51.

The European share market ended the week 1.25% down, wiping out any weekly gains. This was due to a final-minute decline triggered by Trump's comments.

U.S. Treasury Yields dropped to multi-week lows after investors moved into safe havens in response to Trump's initial comments.

The movement in U.S. government debt yields has been stalled in recent days due to the U.S. shutdown of the federal government, which began on October 1. This shutdown has also halted production of important economic indicators.

In the afternoon, the yield of the 10-year Treasury benchmark note in the United States fell to its lowest level in more than a month. It was down by 9.1 basis points at 4,057%.

After Trump's comments, the U.S. Dollar dropped, lifting the euro and yen in comparison to the greenback. Currencies linked to commodities, raw materials and currencies like the Australian dollar fell.

Last seen at 98.99, the dollar index fell 0.4%. The dollar index is still on track for a gain of 1.66% this week, the biggest since September 2024. This comes after the Japanese yen, and the euro were hit by concerns about fiscal policy in their respective regions.

The euro rose 0.38% to $1.1607, and the yen gained 0.86% on the dollar.

The Japanese currency dropped due to concerns that Bank of Japan might not raise interest rates this year following the surprise victory of fiscal dove Sanae Takayi as leader of the ruling party.

Katsunobu Kato, the Japanese Finance Minister, said that his government is concerned by the excessive volatility of the foreign exchange markets.

Sebastien Lecornu was reappointed as Prime Minister by President Emmanuel Macron in France late Friday night. He had resigned earlier this week. Lecornu's resignation sent the markets into a frenzy on Monday. This week, blue-chip stocks in France fell 2%.

Brent crude dropped $2.49 and settled at $62.73. U.S. crude was down $2.61 at $58.90. Gold spot rose by 0.85%, to $4,008.74 per ounce. (Editing by Susan Fenton and Nick Zieminski; Additional reporting by Marc Jones and Purvi Agarwal in London)

(source: Reuters)