Financial markets experienced a significant downturn on Friday after former President Donald Trump signaled potential escalation in trade tensions with China. The S&P 500 plummeted 2.7%, marking its worst performance since April, while the Dow Jones Industrial Average dropped 878 points and the Nasdaq composite fell 3.6%.

Trump’s social media post suggesting a “massive increase of tariffs” on Chinese imports sent shockwaves through Wall Street. His frustration stems from China’s restrictions on rare earth exports, critical materials used in manufacturing everything from consumer electronics to advanced machinery.

The market’s volatility reflects broader economic uncertainties. Analysts have been warning that stock prices have risen faster than corporate profits, creating concerns about potential market overvaluation. Particularly in the artificial intelligence sector, some experts see parallels with the dot-com bubble of 2000.

Companies across sectors felt the impact, with tech giants like Nvidia and Apple experiencing significant losses. Even Levi Strauss, which reported stronger-than-expected quarterly profits, saw its stock drop 12.6%.

The geopolitical tension also affected global markets, with stock indexes falling across Europe and Asia. The Hong Kong Hang Seng index dropped 1.7%, while France’s CAC 40 fell 1.5%.

Additionally, the oil market experienced notable shifts, with benchmark U.S. crude prices sinking 4.2% following the ceasefire between Israel and Hamas in Gaza. Consumer sentiment remains tepid, with ongoing concerns about high prices and uncertain job prospects.

As trade tensions continue to simmer, investors and economists are closely watching how these developments might impact global economic stability and market performance in the coming months.