The Dow Jones Industrial Average tumbled sharply Friday after President Trump announced a possible massive increase in tariffs on Chinese products on ‘Truth Social.’ The Dow plummeted 878 points, negating much of the indexes’ gains since the disastrous April sell off. (the initial announcement of tariff increases) Both the S&P 500 and Nasdaq Composite suffered their worst days since April’s fall, dropping 2.7% and 3.6% respectively. Trump’s reaction to China’s threat to tighten controls on exports of ‘rare earth metals’ roiled the market place. He said he “may cancel a pre-planned meeting with China’s president and added that he is “considering a massive increase in tariffs.” That dialogue tipped the market on a massive slide. Big oil weakened to “Liberation Day Levels” as China retaliated with threats to begin ‘special port fees’ on all U.S. ships entering Chinese ports. Crude oil weakened, settling in the $58.00 level. The U.S. government shutdown shows no signs of a settlement as Democrats and Republicans are far apart, seemingly unwilling to negotiate. Government layoffs are accelerating with nearly all agencies unable to function effectively.
After positive comments Monday morning from President Trump noting “it will all be fine” and Vice President Vance saying “the U.S. is willing to negotiate with China” posted on social media, tech stocks led a major turn-around. All three indexes responded with the S&P 500 gaining 1.6% and the Nasdaq jumping 2.2%. The Dow Jones added 1.7%. According to The Russell 2000, made up of smaller value companies, it had its best session since August 2025, up 2.8%. According to Kristian Kerr, head of macro strategy for LPL Financial, “Markets have gotten very complacent regarding risk over the past 3 or 4 months. It was a clear warning sign that when you get into that type of environment…it doesn’t take much to get volatility shock.” On Monday the price of gold was $4,108.60 a troy ounce while silver futures hit a new record of $50.13, beating a 1980 record then driven by the Hunt Brothers. Tuesday’s market was a ‘wild ride’ for investors and traders as positive news and negative news filled the day. China issued more ‘sanction-threats’ and President Trump at near close was upset that China was not “ordering” U.S. soybeans, a tit-for-tat confrontation. The day closed with the Dow Jones up 203 points, while the Russell 2000 marched upward, 1.4%, as the index has had consistent upward movement for several weeks. Richard Saperstein, chief investment officer at N.Y.- Based Treasury Partners said, “We’re talking about a trade war between the world’s two largest economies. While techs were jittery on Tuesday, big banks were announcing ‘better than expected quarterly results.’
Gold futures continued to move upward Wednesday as inflation concerns, settling at close at $4,201.60 a troy ounce, the “47th record of the year.” Silver is also on a tear, reaching $53.54 a troy ounce, up $2.16 on Wednesday. Oil prices have continued weaker, falling to $58.21 a barrel, as U.S. producers have increased production, with “oil traders aggressively selling off crude, depressing pump prices.”
Coffee prices are up 22% at the super market… the most severe increase of any grocery store product. Cava-java drinkers, at home, at coffee shops and at drive-thru’s are outraged at the rising cost of ‘their morning brew.’ Poor weather conditions in the leading coffee producing countries of Vietnam, Brazil, Columbia and Ethiopia have hampered consistent production, resulting in higher consumer costs.
RUMBLINGS ON THE STREET
Sam Stovall, chief investment strategist at CFRA Research, WSJ – “The unexpected resurrection of the trade triggered a selloff. What investors are most worried about is this trade war along with softening employment trends resulting in a recession.”
Art Hogan , Chief market strategist at B. Riley Wealth Management, WSJ – “This isn’t the first time we’ve seen a bump in the road since April, but this seems like a significant one. Like one that could knock the wheels off.”
Dan Ives, Wedbush Securities Analyst, WSJ – “This step up in tensions has created a white-knuckle moment for the markets with tech stocks under major pressure.”
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