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)
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