Last Friday, stock markets cracked after China imposed export restrictions on its rare earth metals. U.S. President Trump responded with a threat to impose 100% tariffs on China. This sent the Nasdaq (QQQ) down by 3.56% the S&P 500 (SPY) down by 2.71%, and the Dow Jones off by 1.9%.
The broad sell-off is comparable to one not seen since April’s “Liberation Day” tariffs.
The President wrote on his social networking site that the U.S. would impose 100% tariffs on top of any amount that China is not paying. He threatened export controls on critical software. Stock markets previously expected the U.S. leader and Chinese President Xi Jinping to meet. That may no longer happen.
Speculators who bid shares of Chinese technology firms were caught off guard as well. Alibaba (BABA) stock lost 8.45% to close at $159.01. Baidu (BIDU) also dropped, down 8.09% to close at $121.69 on October 10.
Cryptocurrency bulls framed Bitcoin (BTC-USD) as a safe haven to hedge against risks and the weak U.S. dollar. However, BTC prices also fell, causing $19 billion in liquidations.
An unknown trader with no history of major transactions held a short position against BTC, profiting $192 in profits in a single day.
Investors should continue to consider taking profits in the S&P 500 index ETF (IVV), technology names like Nvidia (NVDA), Amazon (AMZN), and Apple (AAPL).
