Nasdaq Dips Over 800 Points Following Trump's Tariff Threats On China: Investor Sentiment Declines, Greed Index Moves To 'Fear' Zone

The CNN Money Fear and Greed index showed a sharp decline in overall market sentiment, as the index moved into the “Fear” zone on Friday.

U.S. stocks settled lower on Friday, with the Nasdaq Composite falling more than 800 points during the session after President Donald Trump threatened a sweeping increase in tariffs on Chinese imports.

The S&P 500 plunged 2.4% last week, while the Dow also recorded a weekly decline of 2.7%.

“Some very strange things are happening in China! They are becoming very hostile and sending letters to countries throughout the world that they want to impose export controls on every element of production involving rare earths,” Trump wrote on Truth Social. “I was to meet President Xi in two weeks at APEC in South Korea, but now there seems to be no reason to do so.”

Advanced Micro Devices Inc. (AMD) led tech decliners, dropping 7.8% after a spectacular week that had put it on track for its best weekly performance since 2016.

On the economic data front, the University of Michigan consumer sentiment slipped to 55 in October from 55.1 in September and compared to market estimates of 54.2.

Most sectors on the S&P 500 closed on a negative note, with information technology, consumer discretionary and energy stocks recording the biggest losses on Friday. However, consumer staples stocks bucked the overall market trend, closing the session higher.

The Dow Jones closed lower by around 879 points to 45,479.60 on Friday. The S&P 500 fell 2.71% to 6,552.51, while the Nasdaq Composite dipped 3.56% to 22,204.43 during Friday's session.

Investors are awaiting earnings results from Fastenal Co. (FAST) and Rocky Mountain Chocolate Factory Inc. (RMCF) today.

What is CNN Business Fear & Greed Index?

At a current reading of 29.5, the index moved into the “Fear” zone on Friday, compared to a prior reading of 46.6.

The Fear & Greed Index is a measure of the current market sentiment. It is based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index is calculated based on seven equal-weighted indicators. The index ranges from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness.

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