Stocks opened comfortably higher Friday but fell off a cliff mid-morning after President Donald Trump's dire warning on China. Uncertainty surrounding the ongoing government shutdown – which will delay a key inflation update – did little to shift sentiment.
Around 11 am Eastern Standard Time, President Trump posted on Truth Social that "very strange things" are happening with China, and that the country is "becoming very hostile" regarding the production of rare earths.
Beijing has "a near-stranglehold on rare earth elements, a group of obscure minerals that happen to be vital to many high-tech applications and products," writes David Payne, staff economist of The Kiplinger Letter.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Payne adds that extracting and refining rare earths is "a messy process that can cause a lot of pollution," and China, which realized this decades ago, has cornered the market. And it is using its outsize exposure as a "potent trade weapon."
Indeed, Trump noted in his post that China wants "to impose Export Controls on each and every element of production having to do with Rare Earths, and virtually anything else they can think of, even if it's not manufactured in China."
The president added that he was scheduled to meet with Chinese President Xi Jinping in two weeks, "but now there seems to be no reason to do so." He also threatened "a massive increase of Tariffs."
While the main indexes were sporting modest gains in early trading, they ended the day with sizable losses. At the close, the blue-chip Dow Jones Industrial Average was down 1.9% at 45,479, the broader S&P 500 was 2.7% lower at 6,552, and the tech-heavy Nasdaq Composite had shed 3.6% to 22,204.
Tech, Chinese stocks sink after Trump's post
Tech stocks with exposure to China were among the day's biggest decliners. Apple (AAPL) fell 3.5%, Nvidia (NVDA) gave back 4.9%, and Tesla (TSLA) slumped 5.1%.
U.S.-listed Chinese stocks also tumbled, with e-commerce giant Alibaba Group Holding (BABA, -8.5%) and Temu parent PDD Holdings (PDD, -5.3%) closing deep in the red.
Applied Digital climbs 16% after earnings
Not all of the day's price action was down. Applied Digital (APLD) shares climbed 16.1% after the digital infrastructure and data center provider said fiscal first-quarter revenue surged 84% to $64.2 million – beating analysts' estimates.
It also reported a narrower-than-expected fiscal Q1 loss of 3 cents per share.
"We have increasing confidence in APLD's pipeline," says Needham analyst John Todaro, who has a Buy rating on the tech stock and nearly doubled his price target to $41 from $21. "We view Applied Digital as an attractive way to gain 'pick-and-shovel' exposure to the fast-growing AI & HPC [high-performance computing] space."
Todaro notes that APLD's bitcoin mining business offers investors some "downside protection."
Earnings season starts next week, CPI delayed
Next week will be a big one on Wall Street. For one, it's the unofficial start of third-quarter earnings season, with several big banks – including JPMorgan Chase (JPM) and Goldman Sachs (GS) – making an appearance on the earnings calendar.
Meanwhile, an early week appearance from Fed Chair Jerome Powell marks one of the highlights of the economic calendar. Wall Street will have to wait a little longer to see the September Consumer Price Index (CPI) report, though.
The inflation update was supposed to be released on Wednesday morning, but it will be delayed due to the government shutdown.
According to the Bureau of Labor Statistics, the September CPI will be published on Friday, October 24, at 8:30 am EST. However, the BLS also said that "no other releases will be rescheduled or produced until the resumption of regular government services."
Related content
- Is the Stock Market Closed on Columbus Day/Indigenous Peoples' Day in 2025?
- How to Invest for Fall Rate Cuts by the Fed
- Should You Buy Gold as It Tops $4,000? Here's What the Experts Say
-
Stocks Sink with Meta, Microsoft: Stock Market TodayAlphabet was a bright light among the Magnificent 7 stocks today after the Google parent's quarterly revenue topped $100 billion for the first time.
-
The Original Property Tax Hack: Avoiding The ‘Window Tax’Property Taxes Here’s how homeowners can challenge their home assessment and potentially reduce their property taxes — with a little lesson from history.
-
Stocks Sink with Meta, Microsoft: Stock Market Today
Alphabet was a bright light among the Magnificent 7 stocks today after the Google parent's quarterly revenue topped $100 billion for the first time.
-
Five Downsides of Dividend Investing for Retirees, From a Financial PlannerCan you rely on dividend-paying stocks for retirement income? You'd have to be extremely wealthy — and even then, the downsides could be considerable.
-
Dow, S&P 500 Slip on December Rate Cut Worries, Nvidia Boosts Nasdaq: Stock Market TodayNvidia became the first company ever to boast a $5 trillion market cap, but it wasn't enough to lift the Dow and the S&P 500.
-
I'm a CPA: Control These Three Levers to Keep Your Retirement on TrackThink of investing in terms of time, savings and risk. By carefully monitoring all three, you'll keep your retirement plans heading in the right direction.
-
Stocks Hit Fresh Highs Ahead of the Fed As Earnings Pump Optimism: Stock Market TodaySHW and UNH were two of the best Dow Jones stocks Tuesday, thanks to solid earnings reports, and MSFT closed with a $4 trillion market cap.
-
Targa Resources, Take-Two Interactive, Boston Scientific: Why Experts Rate These Stocks at Strong BuyWall Street is highly bullish on these three high-quality stocks.
-
Debunking Three Myths About Defined Outcome ETFs (aka Buffered ETFs)Defined outcome ETFs offer a middle ground between traditional equity and fixed-income investments, helping provide downside protection and upside participation.
-
This Is Why Judge Judy Says Details Are Important in Contracts: This Contract Had HolesA couple's disastrous experience with reclaimed wood flooring led to safety hazards and a lesson in the critical importance of detailed contracts.
