A tariff shock from Washington and fresh China rare-earth frictions set off a cross-asset rout: the Dow fell 1.9%, S&P 500 2.7%, Nasdaq 3.6%, while crypto suffered a record ~$19B liquidation wave within hours
Markets lurched into a global risk-off late Friday after U.S. President Donald Trump threatened a “massive” hike in tariffs on Chinese imports and blasted Beijing’s tighter controls on rare-earth exports. Equities, crypto and high-beta plays fell in tandem as traders rushed to de-risk into the weekend.
Wall Street’s fast fade
U.S. stocks logged their worst session since April: the S&P 500 sank 2.71%, the Nasdaq Composite dropped 3.56%, and the Dow slid 1.90%. Tech and semiconductors led declines as supply-chain sensitivity to rare-earths came back into focus. By several media tallies, the move erased more than $1.5 trillion in U.S. market value in a matter of hours.
Crypto’s ‘largest ever’ liquidation day
Digital assets mirrored the shock but with leverage: data trackers and multiple outlets estimated ~$19 billion in crypto positions were liquidated over 24 hours — the biggest single-day wipeout on record. Bitcoin (BTC) plunged under $119,000 and printed lows near $104,800 intraday; Ether (ETH) dropped toward the $3,600–$3,800 band as forced unwinds cascaded.
Beyond BTC and ETH, altcoins bled hard: baskets tracked by crypto desks showed double-digit losses across dozens of names, with SOL, XRP, DOGE, LINK and others slumping before staging partial rebounds as books thinned into the close.
Why the macro headline hit so hard
Traders framed the move as a classic policy-shock → liquidity-shock chain. The tariff threat arrived alongside talk of scrapping or downgrading a Trump–Xi meeting and followed Beijing’s expanded export restrictions, reviving the 2018–2019 trade-war playbook. With volatility jumping and some market makers reducing size, slippage widened and liquidation loops accelerated.
Tape checks: what the numbers say
- U.S. indices: S&P −2.71%, Nasdaq −3.56%, Dow −1.90% (worst day since April).
- BTC/ETH lows: BTC printed near $104.8K; ETH slipped into the $3.6Ks–$3.8Ks.
- Liquidations: Roughly $19B in 24h — a new high-water mark — with billions flushed in the first hour alone.
- Crypto market cap: Initial drawdown of ~$125B as the headline hit, per market trackers.
What to watch next (48–72 hours)
- Policy specifics: Any formal tariff docket — size, scope, timing — plus signals of Chinese retaliation on rare-earth licensing. Details, not slogans, will steer risk premia.
- Cross-asset stress: Equity breadth and semis; if weakness persists there, crypto beta typically stays capped.
- Derivatives health: Funding, basis and OI rebuild; another multibillion liquidation print without macro relief would argue for patience rather than knife-catching.
Bottom line
A single geopolitical shock turned a calm tape into a cross-asset rout. U.S. stocks gave back more than $1.5T in value and crypto endured a record ~$19B liquidation day. This was macro-led, not a crypto plumbing failure. With leverage partially cleansed, expect two-way volatility and headline-sensitive ranges until the tariff path is clarified.
