Market Tumbles 200 Points: Fed’s Caution, Trump’s China Threats Ignite Chaos

U.S. Stocks Dip Amid Trump’s trade Threats to China

U.S. stocks took a hit on Friday, May 30, despite positive inflation numbers. The Dow Jones dropped 240 points, or 0.57%, while the S&P 500 fell by 60 points, or 1.00%. The tech-heavy Nasdaq saw the biggest loss, down 307 points, or 1.60%.

President Donald Trump’s renewed trade threats against China overshadowed good inflation data. The Dow Jones lost 240 points, and the S&P 500 fell by 60 points. The tech-focused nasdaq suffered the most, dropping 307 points. The market’s dip was largely due to President Trump’s latest threats against China’s trade practices.

On May 30,Trump accused China of breaking its trade agreement with the U.S. He did not clarify the violations but tweeted, “China has totally violated its agreement with us.” This uncertainty has been unsettling the markets since April 2, when Trump first announced tariffs on major U.S. trading partners.

Even though a federal court struck down Trump’s tariffs on May 29, the ongoing tension is causing a stock market pullback. Tariffs are also affecting Federal Reserve policy. A Morgan Stanley analyst believes tariffs will cause inflation in the U.S.,and the Fed is aware of this.

In April,core inflation rose to 2.5%, its highest since 2021. However, the Fed is likely to keep rates steady. Fed Chair Jerome Powell has repeatedly stated a wait-and-see approach since April.