Halloween Comes Early As Trump’s Truth Social Post Sparks $1.7 Trillion Selloff… Dalio's Debt Bomb

Spooky season came early… and this time the monster isn’t under the bed, it’s tweeting from Truth Social.

Stonks got rug-pulled to end the week after Donald Trump decided to play trade war DJ again, spinning his favorite track: “Drop It Like It’s Yuan.”

Before the comments hit, everything was sunshine and stonks… the Nasdaq even touched a new intraday record. Then Trump opened Truth Social and in a very Taylor Swift type of way told Xi Jinping, “We’re never ever ever getting back together.”

“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,” Trump posted. “We’re calculating a massive increase of tariffs on Chinese products coming into the United States.”

To sum it up: negotiations are dead, tariffs are alive, and investors who spent the week insisting the AI bubble wasn’t real are about to get a masterclass in what “air coming out of the trade” really looks like. The Dow fell 721 points (-1.6%), its worst day since June. The S&P 500 dropped 2.2%, and the Nasdaq got shallacked with a 2.9% loss (flashbacks to March anyone?).

Naturally, tech names with heavy exposure to China took the brunt of the beating… Nvidia (-3%), AMD (-6%), and Tesla (-4%) all got clipped. Chinese tech wasn’t spared either: Alibaba (-6%), Tencent, and Baidu all got yeeted over the Great Wall after Trump canceled his meeting with Xi.

Oil even caught strays… crude prices dipped 2.1% as traders priced in slower global demand from another trade war.

So what set off Trump’s latest tariff tirade? Beijing just threw up new walls around the rare earths market… the metals that keep everything from EVs and fighter jets to AI data centers running. Under China’s new rule, any product containing more than 0.1% rare earth content now needs a government license to be exported. In short, Xi just gave himself a kill switch for global tech supply chains.

Trump, never one to take that quietly, accused China of holding the world “captive” and teased new tariffs that could make the 2018 trade war look like the tutorial level. “Expectations for a China trade deal just got swept off the table,” said Jeff Kilburg of KKM Financial. “Profit takers are out in full force.” Translation: panic sellers, assemble.

While everyone else was busy watching their portfolios melt faster than a snow cone in July, Bridgewater’s Ray Dalio decided to hop on the mic and add a little more panic to the playlist.

He warned that America’s debt binge is starting to look a lot like the lead-up to World War II, calling it a “deficit/debt bomb” and even suggesting political polarization could ignite a “civil war of some sort.”

And while most people’s first instinct was to pat him on the shoulder and say, “Okay, grandpa, let’s get you to bed,” it didn’t exactly calm anyone’s nerves.

In a sea of red, one tiny biotech refused to drown. Protagonist Therapeutics (PTGX) launched 33% after a Wall Street Journal report that Johnson & Johnson might buy them up.

It’s part of a larger buying spree in the sector… Bristol Myers dropped $1.5B for Orbital Therapeutics today, and Novo Nordisk agreed to pay $5.2B for Akero Therapeutics yesterday.

And on top of all the tariff reenactments… the U.S. government shutdown dragged into Day 10 with no signs of progress. Meaning: the Senate has failed seven times to pass temporary funding, and to make matters worse (if you have a .gov email at work) the administration confirmed that federal layoffs “have begun.” Budget chief Russell Vought literally posted on X: “The RIFs have begun.” (In other words: “people are getting canned.”)

Between trade wars, debt bombs, and a full-on shutdown, it’s safe to say Wall Street’s “Soft Landing” fantasy just crash-landed. Even the VIX (Wall Street’s fear gauge) spiked above 22, its highest since June.

So if you opened your brokerage account and thought, “Hey, maybe I’ll buy the dip”… you definitely had your opportunity. Just don’t be surprised if this dip keeps dipping unless Trump and Xi Jin Ping hug it out soon. 

And happy Friday to all you legends rolling with our Stock Prophet Watchlist…  because damn, we lit it up this week. We snagged a 117% rocket on GWH, 35% on GORV, another 35% on SLE, and a monster 172% on QNRX.

That adds up to 3,315% in total long-side moves we called out this week. Yeah, we’ll take that kind of heat any day.

As always, catch the full recap inside the Stocks.News app, kick back this weekend, and rest those trigger fingers… Monday’s coming quick, and we’re not easing off the gas.

If you read all of this, congrats for having a 10 second attention span (better than me). As always, here’s our heatmap for today.

At the time of publishing this article, Stocks.News holds positions in  Tesla and Johnson & Johnson as mentioned in the article.