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By Niket Nishant and Sukriti Gupta (Reuters) -Wall Street's calm was shattered on Friday after U.S. President Donald Trump rattled markets with the threat of a "massive increase" in tariffs on Chinese imports over a rare earths dispute, sending indexes tumbling and volatility spiking. In a Truth Social post, Trump also called off his planned meeting with China's President Xi Jinping in South Korea. He said Beijing had been sending letters to countries to tell them that it planned to impose export controls on every element of production related to rare earths. The sharp selloff in indexes disrupted a relatively quiet week for markets, which had been gaining on hopes of dovish monetary policy, and underscored how sensitive investor sentiment remains to trade uncertainty. A fresh flare-up in U.S.-China trade tensions could weigh on global growth and cloud the outlook for corporate America, which is already navigating higher costs. "He's caught the market off guard again and he's thrown more question marks into it," said Robert Pavlik, senior portfolio manager at Dakota Wealth. At 12:11 p.m. ET, the Dow Jones Industrial Average fell 554.58 points, or 1.20%, to 45,803.84, the S&P 500 lost 105.34 points, or 1.56%, to 6,629.77 and the Nasdaq Composite lost 471.76 points, or 2.05%, to 22,552.86. All three indexes were on track for weekly declines if current levels hold. "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. The S&P 500 tech sector lost 2%. Financials fell 1.4% on the S&P 500, while energy stocks declined 1.8%. The Philadelphia SE Semiconductor index dropped 3.7%, among the worst hit after Trump's announcement. China produces over 90% of the world's processed rare earths and rare earth magnets, which are critical for products ranging from electric vehicles and aircraft engines to military radars. Renewed tensions between the two largest global economies could trigger major supply chain disruptions, particularly for companies in technology, EV and defense space. The CBOE volatility index, investors' fear gauge, spiked to the highest in a month. U.S.-listed shares of Chinese companies dropped sharply, with heavyweights Alibaba Group Holding, JD.com Inc and PDD Holdings down between 3.9% and 6.7%. Qualcomm fell 4.5% after China's market regulator said the country had launched an antitrust investigation into the semiconductor manufacturer over its acquisition of Israel's Autotalks. Separately, a preliminary reading of the University of Michigan's consumer sentiment index for October came in at 55, compared with the estimate of 54.2, according to economists polled by Reuters. Declining issues outnumbered advancers by a 2.73-to-1 ratio on the NYSE and by a 3.36-to-1 ratio on the Nasdaq. The S&P 500 posted 17 new 52-week highs and 12 new lows while the Nasdaq Composite recorded 93 new highs and 82 new lows. (Reporting by Niket Nishant, Sukriti Gupta, Purvi Agarwal and Johann M Cherian in Bengaluru; Editing by Anil D'Silva and Shilpi Majumdar)

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By Caroline Valetkevitch NEW YORK (Reuters) -Stock indexes fell sharply, with the Nasdaq down more than 2%, while Treasury yields fell and the U.S. dollar weakened on Friday after President Donald Trump said he was weighing a "massive increase" in tariffs on Chinese goods. Trump said there was no reason to meet with China's President Xi Jinping in two weeks in South Korea as planned, adding in a Truth Social post that the U.S. is calculating a massive increase in tariffs on Chinese imports. "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 scrutinized for having too much fluff built into it," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. The Dow Jones Industrial Average fell 531.75 points, or 1.15%, to 45,826.67, the S&P 500 fell 109.06 points, or 1.62%, to 6,626.05 and the Nasdaq Composite fell 525.03 points, or 2.28%, to 22,496.64. MSCI's gauge of stocks across the globe fell 14.33 points, or 1.44%, to 979.14.The pan-European STOXX 600 index fell 1.22%. The dollar index, which measures the greenback against a basket of currencies, was down 0.46% at 98.93, with the euro up 0.48% at $1.1618. Against the Japanese yen, the dollar weakened 0.93% to151.65. The yen was still headed for declines for the week against the dollar following Japan's political changes and rate outlook uncertainty. The Japanese currency has dropped on concerns that the Bank of Japan may not hike interest rates again this year after fiscal dove Sanae Takaichi's surprise victory to lead the ruling party. Japanese Finance Minister Katsunobu Kato said on Friday that the government was concerned about excessive volatility in the foreign exchange market. In France, President Emmanuel Macron welcomed mainstream political leaders to a crunch meeting at the Elysee ahead of a self-imposed late-Friday deadline to name a new prime minister. In the U.S. Treasury market, the yield on benchmark U.S. 10-year notes fell 8.7 basis points to 4.061%, from 4.148% late on Thursday. (Additional reporting by Marc Jones in London, Gregor Stuart Hunter in Singapore and Purvi Agarwal; Editing by Susan Fenton and Nick Zieminski)

(The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)