The S&P 500 has its worst day since April

Late Friday morning, US President Donald Trump said in a Truth Social post that he was considering a “massive increase” to tariffs on Chinese imports, and what had been a relatively calm trading day turned into a rough sea of red that ended with the S&P 500 having its worst day since April.

Trump said he’s mulling higher levies as well as “many other countermeasures” because of “the hostile ‘order’ that they have just put out” restricting the export of rare earth metals. He also seemingly canceled his upcoming meeting with Chinese President Xi Jinping in South Korea, saying, “Now there seems to be no reason to do so.”

China-exposed stocks immediately took a sharp turn downward, including:

Wafer fab equipment stocks Lam Research, Applied Materials, and KLA Corp, which all count China as their top market. iPhone seller Apple was also affected, as it counts China as a major market and part of its supply chain.

Chip stocks AMD, Intel, Broadcom, and Nvidia were also hit on the news, as rare earths are needed components for semiconductor production, which is a strategically important industry and seemingly at high risk of being adversely impacted by any US retaliation on China.

Major automakers with large footprints in China sank, including Chinese EV titans like BYD, Nio, and XPeng, along with Stellantis, which heavily relies on revenue from sales in China. EV makers Tesla, Rivian, and Lucid also turned red, as they all source raw materials and/or batteries from China.

The big winners of the news? Rare earth stocks. MP Materials — which the US government recently took a stake in — USA Rare Earth, and Critical Metals all jumped following Trump’s post, as investors bet that the administration could play a bigger role in ensuring US access to the resource.

But none of that mattered to the S&P 500, which counts none of those rare earth companies as members — it finished the day down 2.71%, making Friday the fourth-worst session of 2025, as you can see in this interactive chart.

The Takeaway

The rare earth curbs are far from the only recent example of China stepping up its defense of domestic industry and resources. Qualcomm is the subject of an antitrust investigation, stringent checks of semiconductor shipments are reportedly in place as officials look to keep Nvidia’s chips from entering the country, and separate reporting indicates that US ships will be charged an escalating fee for docking at Chinese ports. In other words, this is unlikely to be the end of it.