Just minutes before the market crash, the S&P 500 was inches away from hitting another all-time high. But within hours, it dropped 2.7%, wiping out nearly $2 trillion in market value — all because of one post.
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What Did Trump Say?
At 10:57 a.m. ET, Trump wrote that China was becoming “very hostile” to the rest of the world, especially due to its dominance in rare earth metals — crucial resources used in electronics, batteries, and defense technology.
He accused Beijing of holding the world “captive” with its “monopoly” on these materials and hinted at a “massive increase of tariffs on Chinese products” entering the United States.
That single statement was enough to send shockwaves through global markets.
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How the Markets Reacted
According to Bespoke Investment Group, the reaction was immediate and brutal.
The S&P 500 fell 2.7%, marking its worst performance since April.
Around $2 trillion in value was erased from U.S. stocks.
Investors rushed toward safer assets like gold and U.S. Treasury bonds.
This event shows how political uncertainty and trade tensions can trigger massive volatility in global markets.
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Historical Context
This isn’t the first time Trump’s trade policies have shaken Wall Street. Earlier this year, his so-called “liberation day” tariffs caused a cascading sell-off when duties were unexpectedly raised on imports from nearly every major economy.
Friday’s incident reinforces one undeniable fact — Trump’s words still move markets.
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What’s Next for the Global Economy?
Analysts are warning that if the U.S. imposes new tariffs on China, it could:
Reignite trade wars between the two largest economies.
Push inflation higher due to rising import costs.
Reduce investor confidence in tech and manufacturing sectors dependent on Chinese resources.
Market watchers are now waiting to see if Trump’s team will confirm the proposed tariff policy or clarify his comments to calm investors.
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Final Thoughts
The $2 trillion market crash proves just how fragile the global economy can be in the face of sudden political statements. As investors await further details, one thing is certain: social media and politics continue to shape the financial world like never before.