WSJ What’s News - U.S. Stocks Tumble as Trump Threatens Higher Tariffs on China

Episode Date: October 10, 2025

P.M. Edition for Oct. 10. President Trump responded to recent Chinese actions targeting the U.S. by threatening higher tariffs and export controls on China—a move that sent U.S. markets falling. WSJ reporter Jack Pitcher explains the market reaction. Plus, the White House said today that it has begun mass layoffs of federal workers as a result of the government shutdown. And MIT has become the first university to reject a compact sent by the Trump administration last week offering colleges funding advantages. We hear from WSJ reporter Doug Belkin about why the university rejected it, and what it means for other universities faced with a similar proposal. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

This advertisement is brought to you by TALIS. TALUS's industry-leading platforms protect critical applications, data, and identities. Anywhere at scale with the highest ROI, that's why the most trusted companies in the world rely on TALIS to protect what matters most. Learn more at TALISGrup.com slash cyber. President Trump renews his tariff threats against China. Plus, MIT has become the first university to reject a proposal from the Trump administration. What happens next? The fact that MIT is first out of the gate and rejected it, I think, is probably a political problem for the Trump White House.

And what they do about it is anybody's guess, but they tend to counterpunch hard. And Israeli troops retreat as the ceasefire takes hold in Gaza. It's Friday, October 10th. I'm Alex O'Soulaf for the Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. Trade tensions between the U.S. and China are heating up. Over the past two days, Beijing has unleashed a barrage of actions that threatened to derail a fragile status quo with Washington. Yesterday, China announced new restrictions on rare earth materials.

China dominates processing capabilities for rare earths, giving it leverage over the U.S. and other nations. And then today, China's top market regulator said that it had launched an investigation into Qualcomm, one of the U.S.'s most important semiconductor companies, for suspected violation of the country's anti-monopoly law. The regulator said that the probe is tied to Qualcomm's acquisition of Israeli startup auto talks. A Qualcomm spokeswoman said the company is fully cooperating with the Chinese regulator. President Trump then responded to Beijing's moves, threatening in a social media post to raise tariffs and impose export controls on China. His post came before an expected meeting between Trump and Chinese leader Xi Jinping at the upcoming APEC summit in South Korea. An encounter Trump suggested will no longer go forward, as there was now, quote, no reason to meet.

U.S. stocks fell sharply on Trump's tariff threat. The NASDAQ led the losses, tumbling about three. 0.6%. The S&P 500 fell 2.7%, and the Dow dropped 1.9%. U.S. chip stocks were hit hard, with AMD falling 7.7%, and Broadcom dropping almost 6%. Regional banks slump, too, reflecting concern that an escalating trade war could further hit economic growth. WSJ reporter Jack Pitcher offered some insight on the market reaction. A lot of the enthusiasm we've seen over the last six months was about the idea that Trump didn't really mean what he said on the trade war, deals were getting worked out, and he wasn't serious about that. The reintroduction today of

escalating tensions with China sparked a lot of fears because a trade war is not just a one-way streets. We're opening up a path where China can introduce large new levies as well, and that has investors feeling some of the same fears that they did back in April. In the world of commodities, metals are so hot right now. There's gold, which breached $4,000 an ounce this week, and silver neared a record high. Beyond the precious metals, industrial ones like copper, have been strong performers for the past few years. WSJ heard on the street columnist Jinju Lee writes that the value of aluminum, a metal used for everything from soda cans to electric vehicles, could be the next to pop,

as its supply threatens to fall short of rising demand. Jinchu, I feel like I haven't heard as much about aluminum in the past few years as some of these other metals. Why is that? Metals like copper and gold have been in the headlines for different reasons, but mainly because their prices are rising so quickly. Aluminum's price has been going up this year, but not as much. And that's mainly because the metal has been very abundant for many years. China has made plenty of it using cheap coal power for the last two decades. But you write that surplus is set to swing into a deficit soon. What's going on there?

So China has a self-imposed cap on aluminum production, and it's close to meeting that cap now. And demand for aluminum is set to grow at a healthy pace because it's a very important metal in the energy transition. It's used in electric vehicle, solar energy, transmission lines, and even data centers. And everywhere in the world, electricity is becoming a more scarce commodity. Producing aluminum is a very power-intensive process. So electricity itself is becoming the bottleneck for more aluminum supply. So what can producers do to increase the supply? They need cheap power, and that's very hard to get.

Or they can recycle more aluminum. But the problem is there's only so much scrap metal can do to meet demand because certain applications of aluminum need very pure aluminum. How likely is it that the U.S. will start producing its own aluminum? In the U.S., it's really hard to imagine a scenario where there would be more aluminum production because electricity is so expensive. There's actually only four aluminum smelters left operating in the U.S. that just tells you how difficult it is. That was W.S.J. Heard on the street columnist, Jinju Lee. Thanks, Jinju.

Thank you. The White House said today that it is conducting mass layoffs of federal employees in response to the government shutdown, which has now stretched into its 10th day. An official from the White House Office of Management and Budget characterized the retrenchment, as substantial, and a White House official said it would affect thousands of federal workers. Officials said that employees had received layoff notices at the Departments of Health and Human Services, education, commerce, treasury, and others. The layoffs are an unprecedented step that follows through on weeks of threats meant to

increase pressure on Democrats. At a news conference this afternoon, House Minority Leader Hakeem Jeffries put the blame for the shutdown on the president and members of his party. people are sick and tired of the chaos, crisis, and confusion that has been visited upon the country by Donald Trump and Republican complete control of Congress. At a separate news conference, Senate Majority Leader John Thune said that passing a stopgap funding bill is the way to bring an end to the shutdown. We need five bold, courageous, Democrats with a backbone who are willing to take on their

far-left activist base, join us in passing this to do it any time. The Israeli military said today that a ceasefire in Gaza went into effect at noon local time. Israeli and Arab officials said that Israeli troops withdrew this morning from parts of the Gaza Strip, and Hamas said it would begin deploying internal security forces to the areas, a sign that the group is looking to reassert its authority in Gaza. Mediators say that the Israeli troop withdrawal starts a 72-hour window for the release of the hostages. Officials involved in the negotiations said final details are still being smoothed out between Israel and Hamas in Egypt, including the precise demarcation of the withdrawal lines, the release of Palestinian prisoners held by Israel,

and control of the Rafa border crossing between Egypt and Gaza. Coming up, why MIT rejected a proposal offering funding advantages from the Trump administration. That's after the break. Isn't home where we all want to be? Reba here for Realtor.com, the pro's number one most trusted app. Finding a home is like dating. You're searching for the one. With over 500,000 new listings every month, you can find the one today.

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Meanwhile, First Lady Melania Trump said today, she has an open channel of communication with Russian President Vladimir Putin over the welfare of children affected by the war in Ukraine. In an announcement made in the foyer of the White House, the First Lady said that this back channel resulted in the reunification of eight children displaced since Russia's invasion of Ukraine and that she expects more children will be reunified. We have agreed to cooperate with each other for the benefit of all people involved in this war. My representative has been working directly with President Putin's team to ensure the safe reunification of children with their families.

According to Ukraine's state-run Bring Kids Back program, nearly 20,000 Ukrainian children have been abducted since the start of the war, and only a fraction have been returned. In France, President Emmanuel Macron has reappointed Sebastian LeCourne as prime minister, a post he quit less than a week ago. The move ratchets up fears that France has become ungovernable. In reinstating LeCornou, a close ally, Macron risks deepening the frustration of lawmakers in a fractious national assembly. It's also a sign of how Macron's options have dwindled as he seeks a government capable of surviving a no-confidence

vote and passing a budget that narrows the country's gaping deficit. Today, the Massachusetts Institute of Technology became the first university to reject a sweeping proposal from the Trump administration, offering colleges funding advantages in exchange for far-reaching campus reforms. Doug Belkin covers higher education for the journal and is here to tell us more. Doug, let's start with this compact. It's called the Compact for Academic Excellence in Higher Education. What is it and what does it entail? This compact was extended last week by the Trump administration to nine universities and essentially is saying, we want to hold you to standards that we consider important around admissions, hiring student life in exchange for preferential access to federal funds.

So MIT has rejected it. Why did they say they did that? MIT is really the first mover here, and they've rejected it, and they've said that if you're going to give grants based on the merit of the science and the research they're trying to do, that really should be the only reason. you're giving a grant. These things are extraneous and they're essentially going to get in the way of science. How does this compact and some of the issues that are coming up in it compare to other deals that the Trump administration has been seeking to strike with universities like Harvard and Columbia? At the foundation, the same sticking point exists. Universities take a lot of money from the federal government, especially research universities, but they have almost entirely been allowed to operate as they see fit. And this is the Trump administration saying those days are

over. You guys have not governed yourself successfully, and we're going to put standards that you're going to have to listen to if you want to continue to get those federal funds. And the universities say if we lose our independence, will be seeding our ability to innovate because we won't be able to follow our academic interest. And that is a big problem for higher education. So what happens now in terms of these conversations with other universities and for MIT? The fact that MIT is first out of the gate and rejected it, I think it's probably a political problem for the Trump White House. And what they do about it is anybody's guess, but they tend to counterpunch hard. If the other universities are looking for political cover, then MIT has provided some of that.

The other issue is that MIT is an incredibly important institution. They do a lot of defense work for DARPA. There's a lot of things happening around MIT that are important to the country, to the administration. So this is very sensitive and important. matter that's just popping up. That was WSJ reporter, Doug Belkin. Thank you, Doug. Thank you.

And that's what's news for this week. Tomorrow, you can look out for our weekly markets wrap-up, what's news and markets? Then on Sunday, we'll be discussing how Hollywood is reacting to artificial intelligence. From the shifting locations of where films are shot to so-called AI actors, we take a look at how Hollywood and the people who work there are keeping up and what the rise of AI means for content creation more broadly. That's in What's New Sunday.

And we'll be back with our regular show on Monday morning. Today's show is produced by Pierre Bianameh and Rodney Davis with supervising producer Jana Haran. Michael Laval wrote our theme music. Aisha El-Muslim is our development producer. Chris Zinsley is our deputy editor. And Falana Patterson is the Wall Street Journal's head of news audio. I'm Alex Osala.

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