EBC Markets Briefing | ​US stocks sink on Trump's wrath

Wall Street's rally hit a wall on Friday Trump's renewed tariff threats against China triggered a broad sell-off across risk assets. His hostile remarks caught markets by surprise ahead of talks between Beijing and Washington.

China dramatically expanded its rare earths export controls on Thursday, adding five new elements and extra scrutiny for semiconductor users as Beijing tightens control over the sector.

The S&P 500 and Nasdaq 100 both posted their sharpest one-day losses since April, while the VIX volatility index spiked nearly 25%. The Magnificent Seven wiped out $500 billion in total.

An escalating trade war between the two largest global economies could trigger major supply chain disruptions, particularly for the technology, electric vehicle and defence industries.

The BOE has warned that the risk of a "sharp market correction" has increased, noting that valuations appear stretched, particularly for AI-focused tech firms.

It added that "downside factors included disappointing AI capability/adoption progress or increased competition, which could drive a re-evaluation of currently high expected future earnings."

The Nasdaq 100's sharp decline was capped by its 50 SMA, but the risk remains slightly towards the downside. We see the index digest the latest loss in the immediate term.

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