03:39 PM EDT, 10/10/2025 (MT Newswires) -- US equity indexes sank with government bond yields ahead of the close on Friday as President Donald Trump's warning of a "massive" increase in tariffs on China spooked investors.

The Nasdaq Composite slumped 2.9% to 22,354.1, with the S&P 500 down 2.2% to 6,588.2 and the Dow Jones Industrial Average 1.6% lower at 45,627.5. All sectors except consumer staples fell intraday, with consumer discretionary, technology, and energy emerging as the steepest decliners.

"One of the policies that we are calculating at this moment is a massive increase of tariffs on Chinese products coming into the United States of America," Trump said in a Truth Social post Friday. China is "becoming very hostile, and sending letters to countries throughout the world, that they want to impose export controls on each and every element of production having to do with rare earths."

"I was to meet [China's] President Xi [Jinping] in two weeks, at APEC, in South Korea, but now there seems to be no reason to do so," Trump said.

Gold futures jumped 1.3% to $4,023.41, and silver futures advanced 0.8% to $47.52.

Most US Treasury yields fell, with the two-year yield down 7.9 basis points to 3.52% and the 10-year rate 9.9 basis points lower at 4.05%.

"As we have navigated this drama since April, we continue to believe the bark will likely be worse than bite this time around as cooler heads prevail," Daniel Ives, global head of technology research at Wedbush Securities, said in a Friday note.

"This is all a game of high-stakes poker going on between the US and China in this AI revolution, as we are also seeing more scrutiny in Beijing around Nvidia's (NVDA) golden chips," Ives added.