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Indexes down: Dow 0.96%, S&P 500 1.47%, Nasdaq 2.17%

(Updates with late morning trading)

By Niket Nishant and Sukriti Gupta

Oct 10 (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 ( PDD ) down between 5.5% and 6%.

Qualcomm ( QCOM ) 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)