US markets today: Wall Street slides as Trump threatens higher China tariffs; investors brace for renewed trade tension

Wall Street slumped on Friday, with major US indices heading for their worst session in months after President Donald Trump threatened to sharply raise tariffs on Chinese imports, unsettling a market that had been trading near record highs.The S&P 500 fell 1.1%, erasing its modest weekly gain, while the Dow Jones Industrial Average tumbled 361 points. The Nasdaq composite dropped 1.7% as investors reacted to Trump’s post on his social media platform, where he said he was considering a “massive increase” in tariffs in response to China’s restrictions on rare earth exports.The remarks interrupted what had been a steady trading session earlier in the day, when the S&P 500 was up 0.2%, the Dow was up 138 points, and the Nasdaq gained 0.2%, AP reported.PepsiCo extended Thursday’s rally, climbing 3.3% after posting stronger-than-expected quarterly earnings. Levi Strauss, however, plunged 10.1% despite reporting better profits, as analysts pointed to high investor expectations following a 42% surge in its stock this year.Market analysts said the broader concern is valuation. “Stocks have risen much faster than earnings, especially in the AI sector. Either prices must correct or profits must catch up,” one trader said.The US market has gained about 35% since April but momentum has slowed in recent weeks amid the ongoing government shutdown, which has delayed key economic data releases.In commodities, US crude prices fell 2.7% to $59.84 a barrel, while Brent crude dropped 2.1% to $63.87, after a ceasefire between Israel and Hamas raised hopes of easing geopolitical tensions and stable oil supplies.Bond yields retreated as the 10-year Treasury yield slipped to 4.09% from 4.14% a day earlier.Meanwhile, a University of Michigan survey showed consumer sentiment remained subdued, with Americans citing high prices and weakening job prospects. “Consumers do not expect meaningful improvement in these factors,” said Joanne Hsu, director of the Surveys of Consumers.Gold prices inched higher but stayed below $4,000 per ounce after Thursday’s slide.Overseas, European markets edged lower, while in Asia, Hong Kong’s Hang Seng fell 1.7% and Japan’s Nikkei 225 dropped 1%. South Korea’s Kospi, reopening after a holiday, jumped 1.7%.Analysts said the renewed uncertainty over trade policy and inflation outlook could test Wall Street’s months-long rally, which has relied heavily on expectations of US rate cuts and stable corporate earnings.