On Friday, shares of U.S. rare earth stocks rose after President Donald Trump accused China of strict export controls and threatened a “massive increase of tariffs on Chinese products” once again—however, the comments ended up triggering a market sell-off.
At issue: China imposed stricter export controls on critical rare earth minerals that the U.S. technology industry depends on for electronics, robotics, and electric vehicles, which are also critical for the defense industry, per CNBC. The news network also reported China will now require foreign entities to obtain a license to export products that contain rare earths worth 0.1% or more of the goods’ value.
“I will be forced, as President of the United States of America, to financially counter their move,” Trump said on Truth Social, his social platform. “There are many other countermeasures that are, likewise, under serious consideration.”
Stock market effect
After Trump announced his plans to raise Beijing’s tariffs, a number of rare earth stocks went up: USA Rare Earth surged 19%, Energy Fuels rose 10%, and MP Materials gained 15%, CNBC reported.
By the end of the day, those stocks had lost some of those gains, with USA Rare Earth up only 6%, Energy Fuels up just 4%, while MP Materials maintained its position, up 10%.
On the other hand, the global cryptocurrency market lost nearly $125 billion within hours. The total global crypto market capitalization was at $4.05 trillion, down 3.94% in the last 24 hours, marking a 83.68% change from one year ago.
Bitcoin’s (BTC) market cap was at $2.32 trillion, representing a Bitcoin dominance of 57.23%. Meanwhile, stablecoins’ market cap was at $310 Billion, with a 7.66% share of the total crypto market cap, according to CoinGecko.
The sell-off spread to the stock market as well, where the S&P 500 lost 2.71%, the Dow Jones Industrial Average closed the day down 878.82 points (1.9%), and the Nasdaq Composite fell 3.56%, CNBC reported. That sell-off included Nvidia (NVDA), which was down almost 5% at the close of the market.