US President Donald Trump speaks prior to signing a presidential proclamation honoring the 90th anniversary of the Social Security Act in the Oval Office of the White House in Washington, DC on August 14, 2025. (Photo by Mandel NGAN / AFP)
Yesterday, stock markets dipped as US President Donald Trump threatened China with tariffs. Oil prices also fell as tensions in the Middle East calmed after the ceasefire in Gaza.
According to AFP, Trump criticized China for unfair trade practices, such as putting new export curbs on rare earths, and threatened Beijing with “huge” tariff increases.
He stated that other important countermeasures were “under consideration” and that he no longer thought it was necessary to meet with Chinese President Xi Jinping at a meeting later this month.
Trump’s sudden change of direction caused Wall Street’s major indexes to drop substantially, with the Nasdaq down two percent in late morning trade.
The dollar lost value compared to its key competitors.
After a trade war with tariffs going back and forth between Washington and Beijing earlier this year, the two sides had been working to calm things down. The Trump-Xi summit was supposed to help keep the shaky truce going.
On Thursday, China imposed new restrictions on the export of rare-earth technologies and commodities. This added to the rules on an important industry that has been a major cause of contention between Beijing and Washington.
As the truce in Gaza went into force, oil prices had already dropped by more than 2%, which eased worries about a larger battle in the region that may disrupt supplies.
The US’s main oil contract, WTI, dropped below $60 a barrel.
Trump’s comments on China, which could hinder trade and economic activity, caused prices to drop further more. WTI and Brent both fell more than three percent after European markets closed.
After Trump’s statements, European markets also fell.
Paris ended the day down 1.5% because French President Emmanuel Macron had to choose a new head of government to get the country out of a political crisis after his former prime minister resigned.
The week saw a lot of new records in several markets. For example, the tech-heavy Nasdaq index, the Frankfurt stock exchange, and gold prices all hit new highs. Silver also rose to its highest level in decades.
This week, buying sentiment got a lift from the announcement that OpenAI, the company that makes ChatGPT, had inked multi-billion-dollar chip deals with AMD in the US and Samsung and SK Hynix in South Korea.
Companies are trying to move ahead in the field of artificial intelligence by spending hundreds of billions of dollars more on top of what they have previously spent.
This has led to a rush of investors into the IT sector, which has caused stock prices to soar. Nvidia, the US chip leader, now has a market capitalization of $4 trillion.
But there are rumors that the surge might lose momentum, which is making traders nervous.
“The AI bubble debate is still going strong. Some people say this is the new internet bubble 2.0 waiting to burst, while others say it’s a bubble that still has room to grow,” said Ipek Ozkardeskaya, a senior analyst at Swissquote Bank.
These kinds of anxieties are part of why gold prices went up to a record high of more than $4,000 an ounce on Wednesday.
Important numbers at about 1530 GMT
New York: The Dow is down 1.0 percent to 45,900.22 points.
New York: The S&P 500 is down 1.4% to 6,640.18.
New York: The Nasdaq Composite is down 2.0% to 22,563.26.
FTSE 100 in London is down 0.9% to 9,427.47 (close).
Paris’s CAC 40 was down 1.5% at 7,918.00 when it closed.
Frankfurt: The DAX fell 1.5% to 24,241.46 at the close.
Tokyo: The Nikkei 225 fell 1.0 percent to 48,088.80 (close).
The Hang Seng Index in Hong Kong fell 1.7 percent to 26,290.32 at the close.
Shanghai Composite: DOWN 0.9% to 3,897.03 (close)
The euro/dollar rate went up from $1.1558 on Thursday to $1.1628.
The pound/dollar rate went risen from $1.3294 to $1.3357.
Dollar/yen: DOWN from 153.14 yen to 151.62 yen
Euro to pound: UP to 87.06 pence from 86.94 pence
Brent North Sea Crude is down 3.1 percent to $63.20 a barrel.
West Texas Intermediate: down 3.1% to $59.45 per barrel
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