04:43 PM EDT, 10/10/2025 (MT Newswires) -- US equity indexes sank at the close on Friday, with the Dow Jones Industrial Average plunging more than 875 points after President Donald Trump's warning of a "massive" increase in tariffs on China sent US government bond yields and the dollar sharply lower.

The Nasdaq Composite slumped 3.6% to 22,204.43, with the S&P 500 down 2.7% to 6,552.51 and the Dow 1.9% lower at 45,479.60. All sectors except consumer staples fell intraday, with consumer discretionary, technology, and communication services 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.

The CBOE Volatility Index, also known as the "fear index," surged 31% to 21.66.

Gold futures jumped 1.4% to $4,029.11, and silver futures advanced 1.4% to $47.78.

Most US Treasury yields fell, with the two-year yield down seven basis points to 3.53% and the 10-year rate 8.9 basis points lower at 4.06%.

The ICE US Dollar Index, which measures greenback strength against a basket of major currencies, slid 0.6% to 98.96.

"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.

In economic news, the University of Michigan's preliminary consumer sentiment index slipped to 55.0 in October from 55.1 in September, compared with expectations for 54.0 in a survey compiled by Bloomberg. Respondents saw one-year inflation expectations at 4.6%, down from 4.7% in September, while five-year inflation expectations remained at 3.7%.

Meanwhile, the partial shutdown of the federal government entered its 10th day as funding bills from Democrats and Republicans reportedly failed in the Senate for the seventh time. No further votes are expected until Tuesday, meaning the stalemate will extend into next week, CBS NEWS reported.

In company news, Mosaic (MOS) said its preliminary Q3 phosphate production fell short of expectations because of "unexpected mechanical issues" at its Riverview sulfuric acid plant and utility interruptions at Bartow in September. Shares of Mosaic slumped 9.2%, among the steepest declines on the S&P 500.

West Texas Intermediate crude oil futures sank 4.4% to $58.83 a barrel.