Stocks hammered by tariff turmoil
A Truth Social post from President Trump threatening a “massive increase” on tariffs sent stocks into their steepest drop-off since April.
US stocks nosedived after President Trump said in a Truth Social post that he is considering a “massive increase” to tariffs on Chinese imports. For the second day in a row, consumer staples was the only sector ETF to finish in the green.
It was the worst day for the S&P 500 since April, when tariff threats roiled markets.
Trump said he’s mulling higher levies as well as “many other countermeasures” because of “the hostile ‘order’ that they have just put out” restricting the export of rare earth metals. Trump also seemingly canceled his meeting with Chinese President Xi Jinping in South Korea in two weeks, saying, “Now there seems to be no reason to do so.”
Stocks most impacted by tariff tensions:
Rare earth stocks MP Materials — which the US government recently took a stake in — USA Rare Earth, and Critical Metals jumped, suggesting investor bets that the administration could play a bigger role in ensuring US access to rare earths.
Wafer fab equipment stocks Lam Research, Applied Materials, and KLA Corp, which all count China as their top market, underperformed, as did iPhone seller Apple.
Chip stocks Advanced Micro Devices, Intel, Broadcom, and Nvidia were hit on the news, as rare earths are needed components for semiconductor production. For Tesla, it’s a similar story given its footprint in China and the importance of rare earths for EVs.
Shares of several other major automakers with large footprints in China sank, including Chinese EV titans like BYD, Nio, and XPeng, along with Stellantis, which heavily relies on revenue from sales in China. EV makers Rivian and Lucid, which source raw materials and/or batteries from China, were also down following the post.
There was also a lot of plain old dumping of recent winners: Super Micro Computer, Coinbase, and Robinhood Markets lagged after Trump’s post as investors cut risk. (Robinhood Markets Inc. is the parent company of Sherwood Media, an independently operated media company subject to certain legal and regulatory restrictions.)
Stocks that moved higher:
Applied Digital soared after the company reported better-than-expected results for its fiscal Q1 and said hyperscalers are lining up to secure capacity as it plans a multiyear expansion.
Nuclear energy company Oklo surged amid heavy call options demand.
Stocks that moved lower:
IonQ fell after announcing plans to raise nearly $2 billion from the sale of stock and warrants to Heights Capital Management.
Levi’s fell after the denim giant topped Q3 estimates but warned of margin pressure tied to tariffs.
