Investor worries that Wall Street's record stock rally would soon fizzle loomed large on Friday after tariffs re-emerged as a market risk.
U.S. equity markets, fresh off midweek record highs, performed an about-face during the trading session after President Donald Trump revived threats to hike tariffs against China. Investors worried that a possible tit-for-tat trade drama between the world's two biggest economies could mark the end of a record-breaking rise in U.S. equities.
Market Snapshot
The Dow Jones Industrial Average had closed down 1.90% while the S&P 500 finished down 2.71%, and the Nasdaq Composite lost 3.56% on the day.
Market Movers
Rare-earth miner MP Materials Corp. jumped 8.4% to $78.34 and USA Rare Earth rose 5% to $32.61 after Trump issued his tariffs threat. MP Materials set a 52-week high of $84.92 earlier in the session.
Nvidia fell 5% after shares of the leading maker of chips for artificial-intelligence applications closed Thursday at $192.57, an all-time high. Shares reversed earlier gains and slumped along with other tech stocks on Friday after Trump signaled increased trade tensions between the U.S. and China. The president's post followed a report that China was stepping up its effort to prevent imports of U.S. semiconductors.
Chinese stocks tumbled in U.S. trading following Trump's threats against China. Alibaba and Baidu were both down more than 8%. Earlier this week, Jefferies analysts reiterated a Buy rating on Alibaba shares, which were named the firm's "top pick."
Fiscal third-quarter adjusted earnings and revenue at Levi Strauss & Co topped analysts' estimates and the jeans maker raised its fiscal-year outlook. Levi Strauss expects fiscal-year revenue to rise 3%, higher than previous guidance that called for an increase of 1% to 2%. The company also boosted its adjusted earnings forecast to $1.27 to $1.32 a share from $1.25 to $1.30. Shares of Levi Strauss, however, fell 13%.
Venture Global, Inc. sank 25% after the U.S.-based natural gas exporter lost an arbitration case against its customer, BP. Venture Global said the International Court of Arbitration had issued a partial final award to BP. The British oil company and several other customers accused Venture Global of withholding contracted liquefied natural gas cargoes, and instead selling them on the spot market to benefit from a surge in prices that was driven by the war in Ukraine.
Qualcomm declined 7.3% as China launched an investigation into the chip company for suspected violations of the country's antimonopoly law. The investigation involves the takeover of Israeli start-up Autotalks, which Qualcomm acquired in June. "We are fully cooperating with SAMR in this matter," a Qualcomm spokesperson told Barron's. "Qualcomm is committed to supporting the development and growth of our customers and partners."
Applied Digital reported a fiscal first-quarter adjusted loss of 3 cents a share, narrower than analysts' estimates that called for a loss of 13 cents. Revenue of $64.2 million beat forecasts of $46.1 million. The company also finalized a new lease agreement with CoreWeave. Shares of Applied Digital, the operator of artificial-intelligence data centers, surged 16%.
Market News
Tech Stocks Tumble After Trump Mulls 'Massive Increase' in Tariffs on Chinese Imports
Tech stocks tumbled on Friday after U.S. President Donald Trump said he was thinking of a "massive increase" in tariffs on Chinese products after China tightened its rare earth export rules on Thursday.
"They are becoming very hostile, and sending letters to Countries throughout the World, that they want 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," said Trump in a post on Truth Social.
On Thursday, China tightened its rare earth export rules that could create issues for an array of companies involved in the semiconductor supply chain, as these elements are crucial in the manufacturing of many high-tech products.
AI chipmakers NVIDIA fell about 5%, while Advanced Micro Devices tumbled around 8%. Broadcom slipped nearly 6%, while Qualcomm fell roughly 7%.
Bitcoin Breaks Below $120K After Trump's 'Massive' Tariff Threat to China
Bitcoin's price fell below $120K in Friday trading after U.S. President Donald Trump's comments about China sparked renewed concerns over tariffs and spurred a broader selloff across risk assets.
The first-ever cryptocurrency fell to as low as $111.9K. Ether fell to $3.82K.