In hours, one social media post erased trillions in equities, triggered the largest crypto liquidation in history, and sent tech stocks reeling. Traders were left scrambling to adjust positions as supply chains, tariffs, and trade talks were suddenly thrown into doubt.
President Donald Trump on Friday warned he was considering a “massive increase” in tariffs on Chinese goods, and Wall Street responded immediately. The Dow Jones fell 1.9%, the S&P 500 lost 2.7%, and the Nasdaq Composite plunged 3.6%, wiping roughly $2 trillion off market value.
Crypto markets were also hammered. Bitcoin, which had earlier in the week reached a record $125,000, plunged more than 12%, trading below $113,000 in London. Data from Coinglass showed this triggered the largest crypto liquidation in history: over $19 billion in positions were liquidated within 24 hours, including $7 billion in less than one hour. More than 1.6 million traders were forced out of positions.
Later on Friday evening, Trump confirmed the escalation. A 100% tariff on all Chinese imports will come into effect 1 November, alongside export controls on critical software. The move followed Beijing restricting rare earth mineral exports and launching an antitrust probe into Qualcomm. Trump also hinted he might cancel the planned APEC summit meeting with Xi Jinping in South Korea later this month.
Markets had been pricing in cautious optimism. U.S.-China trade relations were slowly stabilising, and existing tariffs were already high but manageable. Friday’s posts immediately changed that outlook. Tech, industrials, and supply-chain sensitive sectors sold off, while treasuries and safe-haven assets rose.
China has yet to issue a detailed public response, but markets are already bracing for retaliation. Analysts warn that Beijing could escalate tariffs, restrict exports of critical minerals, or delay trade approvals for U.S. companies. The risk of a full-blown trade standoff is rising, with supply chains, tech production, and commodity markets all potentially caught in the crossfire.
Investors are left weighing how much of Friday’s shock is temporary panic and how much signals a longer, more volatile period ahead.