Trump China Threat Sends Markets Tumbling

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•  11 Oct 2025
 

•   APLD  
   
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•   ESTC  
   
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•   LEVI  
   
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•   MP  
   
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•   VG  
   
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Wall Street closed Friday's trading session deep in the red after a volatile day that saw initial gains evaporate following a provocative tweet from President Donald Trump regarding China's trade practices. The selloff was severe across all major indices, with the Nasdaq Composite bearing the brunt of investor fears about an escalating trade war.

The S&P 500 dropped 2.7% while the Dow Jones Industrial Average fell 1.9%, but tech-heavy Nasdaq took the hardest hit with a 3.5% plunge. The sharp reversal came after Trump posted on social media alleging that China is taking hostile actions against the world, including plans to impose export restrictions on critical materials like rare earth elements that could disrupt global supply chains.

Trump message suggested China is attempting to establish monopolistic control over these essential resources, though he emphasized that the United States holds greater economic power and can respond with measures of its own. The president hinted at imposing additional tariffs on Chinese imports and warned that the free world needs to pay attention to China's behavior, particularly against the backdrop of recent geopolitical changes in the Middle East.

Adding to market anxiety is the ongoing US government shutdown, now entering its tenth day with no progress in congressional negotiations. More than a quarter million federal workers have gone without paychecks, and the Senate has rejected temporary budget proposals for the seventh time. The combination of tariff threats and government paralysis has turned sentiment decidedly negative on Wall Street, with investors concerned these factors will weigh heavily on growth in the coming quarter.

The 10-year Treasury yield stands around 4.05% amid the widespread uncertainty. Economists estimate that each week of government shutdown could shave 0.1% to 0.2% off GDP, in addition to halting the publication of crucial economic data including employment reports, inflation metrics, and growth figures, leaving both the Federal Reserve and investors operating in the dark.

China's response has been swift and strategic. Beijing is tightening oversight on exports of rare earth minerals, lithium batteries, and critical raw materials, a move that deepens the trade conflict with the United States and raises concerns about disruptions to global supply chains serving the energy, high-tech, and defense industries.

$MP Materials Corp jumped 8% on the news while USA Rare Earth gained 5% as investors bet on domestic rare earth producers benefiting from Chinese export restrictions.

$APLD surged 16% after reporting a quarterly loss of just 3 cents per share, far better than the expected 13-cent loss. The company, which operates data centers dedicated to artificial intelligence applications, reported revenue of $64.2 million versus forecasts of only $46.1 million and announced a major server lease agreement with CoreWeave.

$ESTC rose 6% following an upward revision of its 2026 revenue forecast and announcement of a $500 million share buyback program. The data analytics specialist now projects revenue of $1.697 to $1.703 billion, up from previous guidance of $1.679 to $1.689 billion.

$VG plummeted 25% after losing an arbitration case to BP that resulted in over $1 billion in damages. Reports suggest the proceedings could continue for months with potential implications for the company's future gas contracts, creating an overhang on the stock.

$LEVI dropped 12% despite beating earnings expectations and raising full-year guidance to 3% revenue growth from a previous 1% to 2% forecast. The decline came on concerns about more modest projections for subsequent years, showing that even good news wasn't enough to lift stocks in Friday's harsh selling environment.

The precious metals market is seeing dramatic moves as well. Silver has climbed above $50 per ounce for the first time in 45 years, driven by a flight from the dollar, persistent supply deficits, and rising industrial demand fueled by the green energy transition. Gold recently crossed the $4,000 per ounce threshold for the first time in history, reflecting growing inflation concerns and flight-to-safety dynamics.

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