Donald Trump has threatened a “massive” increase in tariffs as he signalled a resumption of the US’s costly trade war with China.

Stocks on Wall Street stocks tumbled on Friday after the US President said he would cancel his upcoming meeting with President Xi Jinping amid a row over rare earth minerals.

Mr Trump accused Beijing of holding the world to ransom by announcing fresh restrictions on exports of the materials, which are essential for the production of semiconductors and crucial modern technology.

He said on Truth Social: “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.

“There are many other countermeasures that are, likewise, under serious consideration.”

US stocks recorded their biggest single-day losses since April. The US benchmark S&P 500 plunged by 2.71pc in its worst day of trading since April 10, during the aftermath of Mr Trump’s “Liberation Day” tariffs.

The Nasdaq slumped by 3.56pc and the Dow Jones Industrial Average dropped by 1.9pc.

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Traders pared back their bets on interest rate cuts this year, as the prospect of new tariffs raised inflation fears. The FTSE 100 also closed down 0.9pc in London, amid broader fears about the global impact of the row.

Mr Trump’s threat has sparked fears of a resumption of a tit-for-tat trade dispute between the two superpowers.

The US imposed tariffs as high as 145pc on Chinese goods earlier this year in the wake of Mr Trump’s “Liberation Day” tariffs. Beijing responded in kind with levies on US imports of 125pc, sending global markets into a tailspin.

Tariffs have come down significantly since then as tensions have eased. In May, after a series of trade talks, Mr Trump reduced levies on Chinese goods to 30pc. Analysts had been hoping for progress on a trade deal with the two leaders scheduled to meet in South Korea at the end of the month.

Diplomatic and economic policy between the two has largely hinged on the personal relationship between Presidents Trump and Xi.

Last month the two men agreed to meet after striking a deal over ownership of the US operations of Chinese social media platform TikTok. Mr Trump hailed a “very productive call” with his counterpart, while China’s official news agency Xinhua described the talks as “positive” and “constructive”.

However, the mood has shifted dramatically this week after China’s Commerce Ministry on Thursday announced heavy-handed export controls on rare earths.

Global companies selling goods containing rare earths sourced from China must now get permission from Beijing to export them, if the rare earths make up at least 0.1pc of the product’s value.

The rules will effectively give Beijing sway over huge sections of major economies. China produces some 90pc of the world’s rare-earth minerals, which are vital in the production of everything from cars to solar panels.

Henry Sanderson, an analyst at the think tank Rusi, said Beijing had made a bid for “extra-territorial control” of the rare-earths supply chain.

Mr Trump said: “There is no way that China should be allowed to hold the World “captive,” but that seems to have been their plan for quite some time […]

“But the U.S. has Monopoly positions also, much stronger and more far reaching than China’s. I have just not chosen to use them, there was never a reason for me to do so — UNTIL NOW!”

Analysts have warned that Beijing’s export rules have the potential to push the US into recession because of the massive threat to AI development, which has become the driving force of American economic growth.

Mr Trump added: “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.”

Other analysts suggested the threat could be a negotiating tactic. Joe Brusuelas, chief economist at RSM US, said: “The Trump administration loves to start its next round of negotiation with seemingly extreme positions, only to quickly converge and cut a deal, it’s the whole point of being transactional.”

However, he added: “There is always a risk that the rhetoric chosen to bring the Chinese to the table could end up provoking Beijing, who then retaliates.”

Beijing on Friday also announced it would charge additional port fees for American-flagged ships, which it said is a countermeasure to US port fees on Chinese vessels announced in April.

From Tuesday, US ships arriving in China will be charged a fee of $56.13 per metric ton, while Chinese ships arriving in the US will be charged a fee of $80 per metric ton.

09:32pm

That’s all from us today, but you can follow the latest business and economics news here. Have a lovely weekend.

09:25pm

US stocks suffered their biggest single-day drop since April after Donald Trump’s new China tariff threat rocked markets.

The S&P 500 closed down 2.71pc in its worst day of trading since April 10, during the aftermath of Mr Trump’s “Liberation Day” tariffs.

The Nasdaq was down by 3.56pc and the Dow Jones Industrial Average dropped by 1.9pc.

Treasury yields (which fall as the values of Treasuries rise) dropped and the price of gold rose as investors raced to safe haven assets amid new fears about the economic outlook.

However, the dollar fell by 0.57pc. Brent crude prices also dropped by 3.85pc to $62.71 per barrel.

09:10pm

Yields on US Treasuries have fallen as investors flock to safe haven assets following Donald Trump’s China tariff threat.

Rates on 10-year US government bonds fell by nine basis points to 4.055pc while rates on two-year Treasuries dropped by seven basis points to 3.522pc. Yields on 30-year notes fell by eight basis points to 4.645pc.

Treasury yields fall when the value of Treasuries rises. Investors are buying up US government bonds because the escalation of tensions between China and the US has brought new fears about the economic outlook.

08:18pm

The dollar dropped on Friday after Donald Trump threatened to hike tariffs against China, reigniting concerns over how the trade war will impact the US economy.

The comments lifted the pound, euro and yen against the greenback, while currencies linked to commodities and raw materials, including the Australian dollar, fell.

“Ultimately, it does create a lot of negativity for the US economy,” said Juan Perez, director of trading at Monex USA in Washington.

“Is China really going to have to be very retaliatory moving forward in order to get the United States to negotiate better? So it creates a lot of doubt.”

The dollar index fell 0.4pc a 98.99. It is still on track for a weekly gain of 1.66pc, the largest since September 2024, after the Japanese yen and euro this week were hurt by fiscal concerns at home.

Traders are also watching for signs on when the US federal government will reopen and release data that will shape Federal Reserve policy.

The US Bureau of Labor Statistics said on Friday it would publish September’s consumer inflation report on Oct 24 to assist the Social Security Administration determine the annual cost-of-living adjustment for 2026.

It comes after many Fed officials expressed concern at their last meeting over inflation risks.

“A lot of the easing that central banks either have done, or in the case of the Fed are considering, is being done with a very finely tuned sensitivity to inflation,” said Eric Theoret, FX strategist at Scotiabank in Toronto.

08:13pm

Calm lasting months on Wall Street was shattered on Friday, and US stocks are falling after Donald Trump threatened to crank tariffs much higher on China.

The S&P 500 is currently down 2.1pc, the Nasdaq is down 2.9pc and the Dow is down 1.5pc.

Stocks had been heading for a slight gain this afternoon, until Mr Trump took to his social media platform and said he is considering “a massive increase of tariffs” on Chinese imports.

He is upset at restrictions China has placed on exports of its rare earths, which are materials that are critical for the manufacturing of everything from consumer electronics to jet engines.

07:57pm

China’s latest restrictions on the export of rare earth minerals will undermine America’s attempt to revitalise is manufacturing base, a think tank has warned.

Gracelin Baskaran, director of the critical minerals security programme at the Center for Strategic and International Studies in Washington, said: “These restrictions undermine our ability to develop our industrial base at a time when we need to. And then second, it’s a powerful negotiating tool.”

She said that China has signalled it is open to negotiations. But it also holds leverage because to dominates the market for rare earths with 70pc of the mining and 93pc of the production of permanent magnets made from them that are crucial to high-tech products and the military.

07:37pm

Donald Trump’s latest criticism of China suggests proper trade negotiations between the two biggest economies is unlikely to be a short term prospect.

Art Hogan, chief market strategist at B. Riley Wealth, told CNBC: “Clearly, our relationship with the second largest economy in the world just got more difficult. The United States are still very dependent on China for a multitude of goods, especially as it pertains to rare earth minerals.

“The escalation of this tension has certainly given investors a reason to take profits on a Friday.”

“It’s hard to know how long it will take to get back to the bargaining table, but it certainly doesn’t look like it’s on the short-term horizon.”

07:27pm

Donald Trump is playing “high stakes poker” and AI stocks will continue to rise during the rest of the year, a leading US broker has said.

Daniel Ives, an analyst at Wedbush Securities, said: “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.

“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 golden chips.

“These moments we view as buying opportunities to own the winners in semis, software, Big Tech, and the AI future as in our view these tensions will not bubble up into a much more tense time vs. the nervous period of time we saw in April.

“That said, our view of tech stocks remains firmly bullish but we will continue to have moments like this that create some panic and nervousness among tech investors.

“We have barely scratched the surface of this 4th Industrial Revolution now playing out around the world led by the Big Tech stalwarts such as Nvidia, Microsoft, the Messi of AI Palantir, Meta, Alphabet and Amazon.

“We believe tech stocks will be strong into year-end and could be up another 7pc+ into the rest of the year as the next part of this AI revolution takes hold with upcoming tech earnings season further swaying investors this is a 1996 Moment ... and NOT a 1999 moment.”

07:20pm

Investors “overlooked” the risks as US stock markets hit ever-higher records, an investment firm has said.

Greg Taylor, chief investment officer at PenderFund Capital Management, said: “When everything is working, you have to be worried that something is going to come out of left field and catch you.

“The market has really gone up and everything has been working. It overlooked a lot of the red flags, and this is a risk that I don’t think was priced into the market at these levels.”

07:06pm

The price of oil fell further this afternoon after Donald Trump threatened to escalate his trade war with China.

Brent crude, the global benchmark, had already been falling in response to a peacemaking in the Middle East. But it fell further after Mr Trump’s remarks, which imply global demand could be curbed.

The price is currently down 3.6pc at $62.85 a barrel.

06:49pm

Donald Trump’s relaunch of his trade war has caused an “abrupt end of AI trade, for now”, a leading broker has said.

Kathleen Brooks, of XTN, said: “A resumption of the trade wars between the world’s two largest economies has halted the market binge on AI stocks.”

She added: “In the past, Donald Trump’s ‘escalate to de-escalate’ strategy has usually led to a backtrack in tariff threats at some stage, the Taco – Trump Always Chickens Out.

“However, US access to Chinese rare earth minerals was seen as vital to a trade deal between the two economic giants. Thus, Trump may not back down this time, which is why the Vix, Wall Street’s fear gauge has surged above 20, and is higher than the average for 2025 so far.”

06:03pm

Wall Street has continued to edge lower after plummeting this afternoon in response to a threat by Donald Trump of higher tariffs.

The S&P 500 is down by more than 1.8pc, the Nasdaq is down by around 2.6pc and the Dow is down by 1.3pc.

“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.

05:59pm

Neither the US or China wants to back down in its escalating trade war, a former US diplomat has said.

Craig Singleton, of the Foundation for Defense of Democracies in Washington, said Trump’s post could “mark the beginning of the end of the tariff truce” that had lowered the tax rates charged by both countries.

“But the risk is clear: mutually assured disruption between the two sides is no longer a metaphor. Both sides are reaching for their economic weapons at the same time, and neither seems willing to back down.”

05:44pm

Donald Trump’s latest tariff threat is a “gut punch” for markets, a leading City analyst has said.

Chris Beauchamp, chief market analyst at IG, said: “It’s been weeks, if not months, since trade wars were really on the menu for markets, but today’s Truth Social tirade threatens to reignite the US-China standoff and shatters the calm that has prevailed since May.

“The Nasdaq 100 hasn’t had a 2pc down day since April, and the news is a second gut punch for markets that had just got over the French drama from earlier in the week.

“Now we have to wait to see if Trump follows through on his threat, and whether this marks a rerun of April’s stock market rout.”

05:39pm

The FTSE 100 fell sharply at the end of trading on Friday as Donald Trump threatened China with a massive increase in tariffs amid a critical minerals dispute.

The FTSE 100 index closed down 0.9pc, at 9,427.47. It had earlier traded as high as 9,519.96.

The FTSE 250 ended 1.1pc lower, at 21,801.84, and the Aim All-Share fell 0.9pc, to 786.33.

For the week, the FTSE 100 was down 0.7pc, the FTSE 250 fell 1.8pc and the AIM All-Share was down 1.3pc.

In European shares on Friday, the Cac 40 in Paris closed down 1.5pc, as did the Dax in Frankfurt.

Stocks in London had struggled for impetus on Friday before Mr Trump’s latest missive.

Mr Trump’s comments added to the uncertainty caused by the ongoing federal government shutdown in the US.

05:36pm

American companies mining rare earth minerals surged this afternoon after Donald Trump warned that China was holding the world “captive” by restricting the export.

MP Materials jumped 14pc, USA Rare Earth added 15.7pc, Energy Fuels gained 8.9pc and NioCorp Developments rose 12.7pc.

MP Materials describes itself at America’s “only fully integrated rare earth producer with capabilities spanning the entire supply chain”. USA Rare Earth has rare earth mining rights in Texas, Energy Fuels is the largest US uranium provider and NioCorp is developing a rare earth project in Nebraska.

05:27pm

An American defence technology business has claimed that there will be a “long-run conflict with China” after Donald Trump hit stepped up his criticism of the Asian economy.

Brian Schimpf, chief executive of Anduril Industries, told Bloomberg Television: “I think it’s going to be a long-run conflict with China, and that’s just something that we’ve got to be prepared for.”

Anduril, which supplies the UK’s Ministry of Defence, is backed by venture capital firms including Peter Thiel’s Founders Fund and Andreessen Horowitz.

05:22pm

The stock market has been “caught off guard” by Donald Trump, a wealth manager has said, as the Nasdaq plummeted by more than 2pc.

Robert Pavlik, senior portfolio manager at Dakota Wealth, said: “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 scrutinised for having too much fluff built into it.”

The dollar index, which measures the greenback against a basket of currencies, is down 0.62pc at 98.92. The pound is up 0.28pc against dollar at $1.3341.

In the US Treasury market, the yield on benchmark US 10-year notes fell to 4.061pc, from 4.148pc late on Thursday.

05:17pm

Soybean futures fell this afternoon after Donald Trump’s latest sabre-rattling on tariffs suggested that he will struggle to get China to boost purchases of American beans.

Prices dropped 1.9pc.

Copper also plunged 4.3pc on fears about demand. But safe-haven metals such as gold, which hit $4,000 an ounce for the first time this week, rose.

Randy Smallwood, of Wheaton Precious Metals, told Bloomberg Television: “I’m confident that we will see gold over $5,000 within the next year.”

“It’s a trajectory that could easily put it up to $10,000 an ounce before the end of the decade. It wouldn’t surprise me at all.”

05:06pm

Trading on Wall Street is volatile this afternoon as the S&P 500’s “fear gauge” surged 35pc, the highest in a month.

The Philadelphia SE Semiconductor index – made up of US chip firms – dropped 3.4pc after Donald Trump’s threat of higher tariffs.

US-listed shares of Chinese companies dropped sharply, with heavyweights Alibaba, JD.com and PDD Holdings down between 5.5pc and 6pc.

05:02pm

The US will suffer higher inflation if Donald Trump goes ahead with his latest threat, a leading economist has said.

Prof Costas Milas, of the University of Liverpool, said: “Donald Trump is now threatening with further tariffs China. If this takes effect, both China (because its exports to the US will take a big hit) and the US (because its inflation rate will rise significantly) will suffer.”

He added that Mr Trump had “managed the unthinkable of uniting all economists (who never agree among themselves on anything)” in opposition to his trade policies.

“If I was a betting man, I would bet that the Nobel Prize Committee in Economics will name an economist who has extensively studied tariffs. This will promote the very area of research needed to understand how tariffs really work and the policies needed to counteract their destructive impact on the global economy.”

04:58pm

Investors have been selling out of AI stocks this afternoon, making the tech-focused Nasdaq the biggest loser of the three main Wall Street indexes.

AI companies are heavily reliant on trade with China and could be among the worst affected from worsening relations between the world’s two biggest economies.

Jeff Kilburg, founder of KKM Financial, said: “Expectations for a China trade deal just got swept off the table. Profit takers are out in full force.”

04:49pm

The price of gold spiked after Donald Trump threatened higher tariffs on China, putting at risk the strength of the global economy.

Gold rose by more than 0.7pc to $4,022.92 an ounce during trading.

The precious metal is seen as a safe haven during risky times, but critics, such as billionaire Warren Buffett, see it as a poor investment because it does pay a dividend.

04:21pm

Wall Street’s main indexes have fallen, erasing earlier gains, after Donald Trump said he was weighing a “massive increase” in tariffs on Chinese goods.

The S&P 500 is down 1pc, the Nasdaq has plunged 1.6pc and the Dow Jones has dropped 0.6pc.

04:11pm

Donald Trump has accused China of inappropriately announcing restrictions on rare earth minerals as peace between Gaza and Israel came into effect.

He wrote on his Truth Social platform: “The Chinese letters [to trading partners] were especially inappropriate in that this was the Day that, after three thousand years of bedlam and fighting, there is PEACE IN THE MIDDLE EAST. I wonder if that timing was coincidental?”

He said: “There is no way that China should be allowed to hold the World ‘captive,’ but that seems to have been their plan for quite some time, starting with the ‘Magnets’ and, other Elements that they have quietly amassed into somewhat of a Monopoly position, a rather sinister and hostile move, to say the least.

“But the U.S. has Monopoly positions also, much stronger and more far reaching than China’s. I have just not chosen to use them, there was never a reason for me to do so — UNTIL NOW!”

He added that the US was calculating “a massive increase of Tariffs on Chinese products coming into the United States of America”.

04:05pm

American ships will be charged additional port fees per voyage starting on Tuesday, China’s transport ministry said.

The fees are a countermeasure against upcoming US port fees on Chinese ships, the ministry said on Friday.

Also starting on Oct 14, ships built in China – or operated or owned by Chinese entities – will need to pay a fee at their first port of call in the United States. Fees could top $1m (£750m) for a ship carrying more than 10,000 containers, and could rise annually through 2028, according to analyst estimates.

Vessels owned or operated by a Chinese entity will face a flat fee of $80 per net tonnage per voyage to the US.

The U.S. fees on China-linked vessels, following a probe by the US Trade Representative, are part of a broader US effort to revive domestic shipbuilding and blunt China’s naval and commercial shipping power.

“It is clearly discriminatory and severely damages the legitimate interests of China’s shipping industry, seriously disrupts the stability of the global supply chain, and seriously undermines the international economic and trade order,” the Chinese ministry said.

Over the past two decades, China has catapulted itself to the number one position in the shipbuilding world, with its biggest shipyards handling both commercial and military projects.

The Chinese fees on US vessels could hurt the US less than the US fees might harm the legion of Chinese ships.

The fees announced by China, like those put in place by the US, “add further complexity and cost to the global network that keeps goods moving and economies connected, and risk harming their exporters, producers and consumers at a time when global trade is already under pressure,” said Joe Kramek, president of the World Shipping Association.

03:12pm

Recruitment agency Hays has cautioned the UK jobs market is set to remain challenging well into 2026.

The group reported an 8pc drop in like-for-like net fees for its first quarter to the end of September, though it said overall trading remained stable, despite the decline.

UK and Ireland net fees fell by 9pc and it revealed another cut to its workforce in the countries, down by 7pc during the quarter and 25pc year on year.

Dirk Hahn, chief executive of Hays, said: “Given ongoing macroeconomic uncertainty, we expect near-term market conditions to remain challenging and, although we have limited forward visibility, we believe this is likely to persist through 2025-26.”

Russ Mould, investment director at AJ Bell, said: “The jobs market still looks tough, judging by Hays’ latest figures...

“Permanent jobs was the weakest area, suggesting employers aren’t feeling confident enough to bring in full-time workers. Instead, they’re looking for more flexible options such as contractors or temporary posts...

“Hays suggests the jobs market blues will continue well into 2026. That certainly looks plausible in the UK given what’s going on. So much uncertainty around what might be in the Budget at the end of November will be giving many companies the chills, putting a freeze on their hiring plans until they know the lay of the land.

“The Recruitment and Employment Confederation’s latest survey shows a ‘marked drop’ in demand for staff, together with reports of redundancies and more candidates looking for work. The British Chambers of Commerce says UK firms are feeling ‘bruised’ and sentiment is weak, with key worries being tax and inflation.”

03:08pm

Consumer sentiment in the US remains in the doldrums, amid continued worries about the effects of Donald Trump’s on-off trade war.

A highly watched survey from the University of Michigan found that sentiment had edged down slightly since September, a 0.2pc fall to 55pc. But comparing this month to a year ago, the measure had fallen from 70.5pc to 55.0pc, a fall of 22pc.

Joanne Hsu, director of the survey, said: “Pocketbook issues like high prices and weakening job prospects remain at the forefront of consumers’ minds. At this time, consumers do not expect meaningful improvement in these factors.”

02:53pm

Wall Street stocks are drifting near their record heights this afternoon, while oil prices have sunk.

The S&P 500 rose 0.2pc, coming off just its second loss in the prior 10 days. The Dow Jones Industrial Average added 0.4pc in early trading, and the Nasdaq composite was 0.2pc higher.

The US stock market has been on a nearly relentless run and soared roughly 35pc since a low in April, but momentum has slowed this past week. With the US government shut down again, several important economic reports that normally move the market have been delayed.

More action may come this afternoon, when the University of Michigan will release its latest update on how US consumers are feeling.

Levi Strauss dropped 9.6pc for one of the market’s bigger moves, even though it reported a stronger profit for the latest quarter than analysts expected.

Its forecast for profit over the full year was within range of Wall Street’s estimates, but the jeans and clothing company could simply be facing the challenge of high expectations. Its stock price came into the day with a stellar surge of nearly 42pc for the year so far.

02:36pm

Oil prices have fallen today after a ceasefire in Gaza came into effect and as the market adjusts to greater supply.

The US benchmark oil contract, WTI, traded under $60 per barrel on Friday.

West Texas Intermediate slid 2.8pc to $59.78 per barrel, while Brent crude, the international benchmark, tumbled 2.7pc to $63.47.

At the weekend, oil cartel Opec+ agreed to raise production by 137,000 barrels a day in November.

02:09pm

Trade on Wall Street’s this afternoon is likely to be heavily influenced by a much-watched consumer sentiment survey, out at 3pm.

Many traders remain bullish on shares despite Thursday’s declines, betting that the artificial intelligence-driven momentum remains intact.

“Investors see little pullbacks as opportunities to nibble in and add more capital. There’s just a lot of money sloshing around in the system,” said Aleksandr Spencer, chief investment officer at Bogart Wealth.

But recent data has reinforced expectations for easing. While the government shutdown has delayed official releases, proxies point to a weakening labour market, with redundancies tied to the impasse likely to deepen the strain.

The University of Michigan’s consumer sentiment survey will be especially closely watched this month, given the added significance it carries because of the official data blackout.

Investors are also weighing developments in the Middle East, where Israeli troops began pulling back from some parts of Gaza under a ceasefire deal with Hamas. Signs of easing tensions could boost sentiment by removing a long-standing overhang on equities.

The earnings season, which kicks off next week, is expected to be the next litmus test for the rally.

02:00pm

A US Fed rate-setter, who in the running for the central bank’s top job, has said that the US needs to keep cutting interest rates.

Christopher Waller told CNBC that private data shows the job market remains weak and buttresses the case for further rate cuts. However, he added the central bank need only move in “cautious” quarter percentage point steps as it evaluates the economy.

Private data, like a recent report from data processor ADP showing the economy lost jobs in September, “are not really representative ... but they are all telling the same story. The labour market is weak.

“We need to cut rates. But we need to be kind of cautious about it ... Do [a quarter of a percentage point], keep going, see how it goes.”

Mr Waller said his interview to be the next Fed chair, with Treasury secretary Scott Bessent, was “great” and not at all political.

Mr Waller is understood to be among five remaining candidates under consideration to succeed Jerome Powell when the current chair’s term expires in May.

01:50pm

The German government has said that China’s latest restrictions on the export of rate earth minerals is of “great concern”.

China dramatically expanded its rare earths export controls on Thursday. It added five new elements and extra scrutiny for semiconductor users as Beijing tightens control over the sector ahead of talks between Donald Trump and Xi Jinping.

China produces over 90pc of the world’s processed rare earths and rare earth magnets. The rare earths are vital materials in products ranging from electric vehicles to aircraft engines and military radars.

Exports of 12 of them are now restricted after the ministry added five – holmium, erbium, thulium, europium and ytterbium – along with related materials.

Germany said it must curb its reliance on supplies from outside of Europe.

Its economy ministry told Bloomberg: “The issue is now being discussed intensively at both national and EU level ... The aim is to achieve a coordinated European approach.”

01:43pm

Canada’s economy posted a surprise 60,400 overall increase in jobs in September, even as the country adapts to US tariffs.

The rise almost entirely reversed the losses of the previous month, according to the new data from Statistics Canada.

However, it was not enough to bring down its multi-year high unemployment rate.

The unemployment rate was at 7.1pc, the same as the prior month when the rate hit a nine-year high outside of the pandemic years.

Canada’s employment gains this year has averaged at about 24,000 jobs per month, almost 10,000 less than seen in the previous two years, as US tariffs have either forced job cuts or dissuaded employers from hiring more.

The proportion of people working in jobs which are unrelated to their qualification as well as immigrants who were over-qualified for their jobs scaled up, reflecting tough labour market conditions, the country’s statistics agency said.

12:06pm

Fund managers say more investors are moving their money into “value” stocks outside the US as valuations surge on Wall Street.

Investors have withdrawn $152bn (£114.5bn) from US “growth” funds in the first nine months of 2025, even as the S&P 500 hits record highs, according to LSEG.

Its data for September showed the withdrawal from US funds aimed at growth stocks has already equalled the total outflows for all of last year.

Growth stocks – companies whose shares are expected to grow much faster than the average market rate – have fuelled the surge in valuations on Wall Street in recent years.

However, concerns have been raised that their valuations have now been inflated by the hype around AI, meaning other assets could offer more potential.

Sebastien Page, chief investment advisor at T. Rowe Price told the Reuters Global Markets Forum: “From a valuation perspective, we like non-US value stocks.”

He said value stocks in Europe, Australasia and the Far East, “has been one of the best-performing asset classes year-to-date”.

“At the same time, by historical standards, the asset class remains cheap,” he added.

John O’Toole of asset management giant Amundi said: “At the end of last year, we diversified away from our long US equity position.”

11:11am

US stock indexes were subdued in premarket trading even as investors showed no sign of giving up on the AI-fuelled rally in shares this year.

The S&P 500 and Nasdaq Composite both touched record highs on Thursday before closing lower as some investors took profits.

Some analysts say the nearly three-year upswing in markets still has room to run, especially if the Federal Reserve continues to lower interest rates.

Other analysts believe the AI trade, so far mostly concentrated in tech, will spill over into energy and construction firms as demand for data centres accelerates.

Francis Gannon, co-chief investment officer at Royce Investment Partners, said: “I feel pretty confident that AI will broaden out to other areas of the market.

“Investors are going to realise that the companies that provide or create AI are one thing, but companies that will be the beneficiaries are equally, if not more, important.”

In premarket trading, the Dow Jones Industrial Average was flat, while the S&P 500 and Nasdaq 100 were down 0.1pc.

09:52am

China stocks pulled back from a 10-year high after Beijing announced tighter export controls on rare earth metals vital for the development of AI.

The Shanghai Composite Index fell 0.9pc to 3,897.03, after touching its highest since 2015 on Thursday, while the blue-chip CSI300 Index dropped 2pc, the biggest single-day decline in nearly five weeks.

Sentiment weakened after China expanded rare earths export controls after the US called earlier this week for broader bans on the export of chipmaking equipment to China.

Beijing has also tightened checks on Nvidia’s artificial intelligence processor imports at major ports, according to the Financial Times.

Hong Kong’s benchmark Hang Seng Index slipped 1.7pc, its fifth consecutive decline and the longest losing streak since March.

09:26am

Talk is growing that valuations among some companies may have run too high, sparking talk of a pull-back in stock markets.

Buying sentiment got another boost this week from news that ChatGPT-maker OpenAI had signed multi-billion-dollar chip deals with South Korean titans Samsung and SK hynix as well as US company AMD.

The spending added to the hundreds of billions already pumped into the sector.

That in turn has seen investors flood into the tech sector, sending stock prices rocketing. US chip leader Nvidia became the firsty company to reach a $4 trillion market capitalisation this year.

However, there are rumblings that the rally could run out of steam, causing jitters on trading floors.

“Some areas of the market appear overheated,” said Keith Lerner at Truist Advisory Services.

09:14am

Thanks for joining me. Investors are beginning to turn their back on US stocks amid concerns that an AI-led rally is hitting its peak. Here is what you need to know.

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The FTSE 100 slipped in early trading as gold fell from its record highs.

The UK’s blue-chip index was down 0.1oc to 9,496.93 as bullion fell back below $4,000 an ounce.

European shares opened flat as Emmanuel Macron is expected to announce a new prime minister soon.

The pan-European STOXX 600 held steady at 571.2 points, headed for a third straight weekly gain.

Nearly all Asian indexes fell except for South Korea’s Kospi, which climbed 1.7pc to 3,610.60 as trading reopened after a holiday. India’s BSE Sensex also gained, adding 0.4pc.

The Kospi’s surge was fueled by a rally of tech shares including SK Hynix, which rose 8.1pc. Samsung Electronics added 6.2pc, boosted by news that Nvidia-backed Reflection AI had raised $2bn (£1.1bn) in funding, increasing its market value to $8bn.

Japan’s Nikkei 225 closed 1pc lower to 48,088.80, pulling back from big gains the previous day after data showed producer prices rose more than expected in September.

Hong Kong’s Hang Seng index shed 1.8pc to 26,277.84, while the Shanghai Composite index slipped nearly 1pc to 3,894.56.

Australia’s S&P/ASX 200 slid more than 0.1pc to 8,958.30. Taiwan’s stock market was closed for a holiday.

Wall Street took a pause on Thursday as US stocks and even the price of gold pulled back from record highs. The S&P 500 slipped 0.3pc from its latest all-time high to 6,735.11. The Dow Jones Industrial Average dropped 0.5pc, to 46,358.42, and the Nasdaq composite edged down by 0.1pc, closing at 23,024.63.

In the bond market, the yield on 10-year US Treasury notes rose to 4.150pc last nigh from 4.123pc late on Wednesday.

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