Trump Shocks Markets: VIX Spikes 25%, S&P 500 Eyes Worst Day Since April

Wall Street's relentless rally came to an abrupt halt Friday as President Donald Trump's renewed tariff threats to China sent investors fleeing risk assets, triggering the biggest volatility spike in months and wiping out hundreds of billions in tech market value.

Trump accused Beijing of becoming "very hostile," claiming China was sending letters to countries worldwide announcing export controls on rare earth materials.

"I was to meet President Xi in two weeks at APEC in South Korea," he wrote, "but now there seems to be no reason to do so."

The president warned he would "financially counter" the move, saying that for every element China has monopolized, "we have two."

He added that the White House is considering a "massive increase of tariffs" on Chinese imports — language that caught markets completely off guard.

The CBOE Volatility Index (VIX) — Wall Street's fear gauge — surged 25% by 2:00 p.m. in New York, on pace for its largest single-day jump since April 4, just two days after Trump's Liberation Day announcement of sweeping tariffs on trading partners.

The S&P 500 – as tracked by the Vanguard S&P 500 ETF (NYSE:VOO) – slid 1.8%, heading for its steepest one-day drop since April 21.

The Nasdaq 100 tumbled 2.2%, also eyeing its worst session since April, with 82 decliners versus only 18 gainers. Arm Holdings plc (NASDAQ:ARM) led losses among tech, plunging 8%. The Dow Jones Industrial Average fell 1.2%.

Sector-wise, the Technology Select Sector SPDR Fund (NYSE:XLK) dropped 2.7% – its worst day since mid-April.

Chart: S&P 500 Plunges As Trump Renews China Tariff Threat

Magnificent Seven Wipe Out Over $500 Billion

The selloff hit the Magnificent Seven particularly hard, erasing more than $500 billion in combined market capitalization. The group's total value stood at roughly $21 trillion at Friday's open.

Nvidia Corp. (NASDAQ:NVDA) alone accounted for about $200 billion of the losses, as its market cap fell to $4.57 trillion.

2025 High Flyers Hit Hard

Friday's market reversal took a heavy toll on the year's top-performing stocks, a sign that investors are taking profits from high flyers.

• Robinhood Markets Inc. (NASDAQ:HOOD) — 2025's best performer in the S&P 500 — dropped 6%, eyeing its worst session in six months.
• Palantir Technologies Inc. (NYSE:PLTR), up 140% year-to-date, fell 3%.
• Micron Technology Inc. (NASDAQ:MU), up 120% for the year, slumped 3.6%,
• GE Vernova Inc. (NYSE:GEV) lost 3%.
• Advanced Micro Devices Inc. (NASDAQ:AMD) fell 5.5%, retracing part of its 35% weekly surge.

Chinese Stocks Plummet

Chinese equities traded in New York suffered the heaviest blows, deepening the rout.

The KraneShares CSI China Internet ETF (NYSE:KWEB) slumped 6.4%, marking its worst day since April 4, while the iShares China Large-Cap ETF (NYSE:FXI) plunged 4.6%.

Oil Prices Sink, Gold Holds Steady

Commodities joined the selloff. WTI crude dropped more than 4% to $59 a barrel, its lowest level in five months, while natural gas at the Henry Hub facility plunged 4.5%.

Silver remained above $50 an ounce, up 1.6%, though facing selling pressure near record highs at $51.23. Gold edged 0.2% higher, hovering just below the psychological $4,000 threshold.

Crypto Assets Extend Losses

Digital assets were also hit hard. Bitcoin (CRYPTO: BTC) slid 3% to $117,000, extending its weekly decline to 5%. Ethereum (CRYPTO: ETH) dropped 6% to $4,100, while Solana (CRYPTO: SOL) and Cardano (CRYPTO: ADA) fell 4% and 5%, respectively.

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