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S&P 500, Nasdaq post biggest one-day pct drops since April

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Dollar falls after Trump comments on China

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Yen loses for the week after political changes in Japan

(Updates with US closing levels, Trump raising tariffs on

Chinese exports to 100%)

By Caroline Valetkevitch

NEW YORK, Oct 10 (Reuters) - Stocks fell sharply on

Friday, with the S&P 500 and Nasdaq suffering their biggest

one-day percentage declines since April 10, while Treasury

yields dropped and the U.S. dollar weakened as comments by

President Donald Trump reignited worries over a U.S.-China trade

war.

After markets closed on Friday, Trump said he was

raising tariffs on Chinese exports to the U.S. to 100% and

imposing export controls on "any and all critical software" in a

reprisal against recently announced export limits by China on

rare earth minerals critical to tech and other manufacturing.

The announcement followed an earlier Trump social media

post on Friday that signaled new levies against Chinese goods

were in the offing, while threatening to cancel a meeting with

President Xi Jinping.

The news sent markets into turmoil, stirring concerns

over how the trade war will affect the U.S. economy. Trump's

April 2 "Liberation Day" tariff announcement set off some of the

most severe market volatility in years.

Technology-related shares led the day's tumble on Wall

Street, with the S&P 500 technology index falling 4%

on the day and an index of semiconductors declining 6.3%.

U.S.-listed shares of Chinese firms also dropped. E-commerce

firm Alibaba Group Holding finished 8.4% lower and

JD.com Inc declined 6.2%. Shares added to losses after

the bell.

Oil prices fell more than $2 a barrel as trade worries

cast a shadow over the demand outlook, while spot gold rallied

back above the $4,000 an ounce milestone.

"He's caught the market off guard again and thrown more

question marks into a market that is being questioned about a

very high degree of enthusiasm and being sort of scrutinized for

having too much fluff built into it," said Robert Pavlik, senior

portfolio manager at Dakota Wealth in Fairfield, Connecticut.

At the close, the Dow Jones Industrial Average was

down 878.82 points, or 1.90%, at 45,479.60, the S&P 500

was down 182.60 points, or 2.71%, at 6,552.51 and the Nasdaq

Composite was down 820.20 points, or 3.56%, at

22,204.43.

U.S. stock indexes had hit record highs earlier this

week, lifted in part by expectations of further interest rate

cuts from the Federal Reserve and optimism about artificial

intelligence-related deals.

The three major U.S. stock indexes posted losses for the

week, with the S&P 500 registering its biggest weekly percentage

decline since May.

MSCI's gauge of stocks across the globe

fell 20.96 points, or 2.11%, to 972.51.

European shares ended 1.25% lower, erasing weekly

gains in a last-minute slide tied to the comments from Trump.

U.S. Treasury yields fell to multi-week lows as investors

moved to safe havens following Trump's early comments.

Movement in U.S. sovereign debt yields had been in a

holding pattern in recent days as a U.S. federal government

shutdown, which began October 1, has halted the production of

key economic indicators.

In afternoon trading, the yield on the benchmark U.S.

10-year Treasury note fell to a more than one-month

low and was last down 9.1 basis points (bps) at 4.057%.

The U.S. dollar dropped after Trump's remarks, which lifted

the euro and the yen against the greenback, while currencies

linked to commodities and raw materials, including the

Australian dollar, fell.

The dollar index was last down 0.4% at 98.99. It

is still set for a weekly gain of 1.66%, the largest since

September 2024, after the Japanese yen and euro this week were

hurt by fiscal concerns in their regions.

The yen was last up 0.86% against the greenback

at 151.73 per dollar on the day, while the euro was up

0.38% on the day at $1.1607.

The Japanese currency has dropped on concerns that the Bank

of Japan may not hike interest rates again this year after

fiscal dove Sanae Takaichi's surprise victory to lead the ruling

party.

Japanese Finance Minister Katsunobu Kato said on Friday that

the government was concerned about excessive volatility in the

foreign exchange market.

In France, President Emmanuel Macron late on Friday named

Sebastien Lecornu as prime minister, reappointing him to a job

he had quit earlier this week. Markets were rocked on Monday

after Lecornu tendered his resignation. French blue chip stocks

dropped 2% this week.

U.S. crude fell $2.61 to settle at $58.90 and Brent

fell $2.49 to settle at $62.73. Spot gold rose

0.85% to $4,008.74 an ounce.

(Additional reporting by Marc Jones in London and Purvi

Agarwal; Editing by Susan Fenton, Nick Zieminski and Edmund

Klamann)