“Some very strange things are happening in China!” Trump wrote against the backdrop of a scheduled meeting later in October with President Xi Jinping in South Korea, ahead of the Asia-Pacific Economic Cooperation summit.
Trump wrote that China is “becoming very hostile,” arguing that the export controls on rare earths would clog world markets for the precious resource.
Tech and green energy sectors, both heavily reliant on rare earth minerals such as neodymium and dysprosium, bore the brunt of the selloff.
Companies tied to rare earth minerals, on the other hand, saw dramatic gains.
MP Materials rose by as much as 15% and USA Rare Earth by as much as 19% before paring gains, while NioCorp Developments climbed by 8%.
On Friday morning, investors came in cautiously optimistic. During a large portion of the week, the SandP 500 continued to rise, setting new records. However, by midday, things had drastically changed after Trump published a long Truth Social post in which he claimed, among other things, that the U. S. . is thinking of raising tariffs on Chinese goods entering the United States “massively.”. S. Afterward, he said the U. A. would start levying 100% tariffs on Chinese imports “above and beyond any tariff they are currently paying” in November. 1. .
Ahead of the Asia-Pacific Economic Cooperation summit, Trump wrote, “Some very strange things are happening in China!” He was responding to a scheduled meeting with President Xi Jinping in South Korea later in October. Trump claimed that the export restrictions on rare earths would block global markets for the valuable resource and that China is “becoming very hostile.”. China, with its trump card of rare earths, which are crucial for high-tech manufacturing, has repeatedly resisted Trump’s tariff-heavy trade policy in 2025.
In afternoon trading, the Dow Jones industrial average fell 1 point, or nearly 900 points, while the S&P 500 fell 2 points, or 7%. The selloff primarily affected the tech and green energy sectors, which both rely heavily on rare earth minerals like dysprosium and neodymium.
Real risks and rare earths.
For a long time, the United States has struggled with the production of rare earth elements, a group of 17 metals that are essential for everything from wind turbines and smartphones to missile guidance systems. S. . -China relations. Nearly 90% of processing capacity and more than 60% of global production are under Chinese control.
Beijing was accused of “a rather sinister and hostile move, to say the least” in Trump’s post. Although he had not yet spoken to his Chinese counterpart, he expressed surprise at the new restrictions and stated that there “seems to be no reason” to meet with Xi in two weeks.
In a statement to Fortune, Chris Zaccarelli, the Chief Investment Officer at Northlight Asset Management, stated that October is already living up to its reputation as one of the most volatile months and that the sell-off that many were anticipating has finally occurred. Given that stocks were “priced-to-perfection” going into the month and that this time of year is known for its volatility, he said it is not surprising that they fell from their highest points. According to Northlight, there may be more volatility in the upcoming weeks, but unless the economy suffers a significant setback, the market should recover later this year, Zaccarelli wrote.
Jamie Cox, Harris Financial Group’s managing partner, concurred in a different statement that “October finally showed up for markets today.”. The tariff noise was all it took to get the major indices to start consolidating. “.”.
According to Jeff Buchbinder, Chief Equity Strategist at LPL Financial, when a negative catalyst disrupts a market narrative that has priced in “a lot of optimism,” the markets were reminded that sell-offs can be “violent.”. “.”.
The hardest-hit Chinese tech companies were Alibaba, Baidu, and JD Dot Com; Alibaba’s stock fell up to 10%, Baidu’s by more than 8%, and JD Dot Com’s by more than 6%. The U. S. . Technology companies like Nvidia, AMD, and Tesla that have a large exposure to China also saw declines; Nvidia lost 4 points, 89%, AMD lost 7 points, and Tesla lost over 5%.
In contrast, companies that dealt with rare earth minerals experienced significant profits. Although NioCorp Developments saw an 8% increase, MP Materials and USA Rare Earth saw increases of up to 15% and 19%, respectively, before paring gains.
After the sell-off, this report was revised to reflect the latest share movements and add more market commentary. [].
