Dow Jones Industrial Average tumbles as Trump reignites tariff talk

• The Dow Jones fell on Friday as investors fled to safety.
• President Trump has returned to the China tariff trough, promising even steeper import taxes.
• Trump also pulled out of an upcoming meeting with Chinese President Xi Jinping.

The Dow Jones Industrial Average (DJIA) soured sharply on Friday, plummeting to its lowest bids in nearly three weeks and declining over 900 points top-to-bottom after US President Donald Trump pulled out of trade talks with Chinese President Xi Jinping and vowed to sharply increase import tariffs on all Chinese goods. According to Trump, China is holding the rest of the world hostage with its protectionist rare earth materials policies.

Market-wide expectations of a potential tariff-easing trade deal between the US and China were demolished by Trump's fresh tariff proclamation, sending investors scurrying into safe havens to cap off an already wobbly week in equities.

Here we go again

China tightened its trade policies around critical minerals earlier this week, slapping a new licensing requirement on any foreign business that exports rare minerals from China. The move came at a time when trade talks between the US and China had hit a lull, but now Trump is once again accelerating his punishing tariff announcements via a social media proclamation, a repeat of the market-destabilizing trade war rhetoric that struck markets earlier in the year.

The Consumer Sentiment Index from the University of Michigan (UoM) fell less than expected for the month of October, providing a slim boost for investors who were bracing for a much worse outcome. UoM 1-year Consumer Inflation Expectations also ticked down to 4.6% from 4.7%, however, the 5-year component remains elevated at 3.7%.

Dow Jones daily chart