(Reuters) - Wall Street's main indexes fell sharply on Friday, after U.S. President Donald Trump said he was weighing a "massive increase" in tariffs on Chinese imports over a rare earth dispute.

In a Truth Social post, Trump also said there was no reason to meet with China's President Xi Jinping in two weeks in South Korea as planned and that China had been sending letters to countries worldwide saying it planned to impose export controls on every element of production related to rare earths.

The comments upended what had been a relatively calm session for markets, which were gaining on hopes of interest rate cuts by the Federal Reserve.

A fresh flare-up in U.S.-China trade tensions could weigh on global growth and cloud the outlook for corporate America, which is already navigating higher costs.

"He's caught the market off guard again and he's thrown more question marks into it," said Robert Pavlik, senior portfolio manager at Dakota Wealth.

At 11:31 a.m. ET, the Dow Jones Industrial Average fell 446.44 points, or 0.96%, to 45,911.98, the S&P 500 lost 99.19 points, or 1.47%, to 6,635.51 and the Nasdaq Composite lost 495.46 points, or 2.17%, to 22,525.37.

"We finally got through the worst of the tariff concerns, and now we find ourselves once again faced with another round of them," said Steve Sosnick, chief market analyst at Interactive Brokers.

The S&P 500 tech sector lost 1.9%. Financials fell 1% on the S&P 500, while energy stocks declined 1.3%.

The Philadelphia SE Semiconductor index dropped 3.4%, among the worst hit after Trump's announcement.

The CBOE volatility index, investors' fear gauge, spiked to the highest in a month.

U.S.-listed shares of Chinese companies dropped sharply, with heavyweights Alibaba Group Holding, JD.com Inc and PDD Holdings down between 5.5% and 6%.

Qualcomm fell 4.6% after China's market regulator said the country has launched an antitrust investigation into the semiconductor manufacturer over its acquisition of Israel's Autotalks.

Separately, a preliminary reading of the University of Michigan's consumer sentiment index for October came in at 55, compared with the estimate of 54.2, according to economists polled by Reuters.

Declining issues outnumbered advancers by a 2.73-to-1 ratio on the NYSE and by a 3.36-to-1 ratio on the Nasdaq.

The S&P 500 posted 17 new 52-week highs and 12 new lows while the Nasdaq Composite recorded 93 new highs and 82 new lows.

(Reporting by Niket Nishant and Sukriti Gupta in Bengaluru; Editing by Anil D'Silva and Shilpi Majumdar)