US stocks closed sharply lower after President Donald Trump threatened to hike tariffs on imports from China, reigniting fears of a trade war that rocked global markets earlier this year.

The Dow fell 879 points, or 1.9 per cent. The broader S&P 500 dropped 2.71 per cent and the tech-heavy Nasdaq Composite slid 3.56 per cent.

The S&P 500 and Nasdaq each posted their worst day since April as a slide in tech stocks led the market lower. The Dow posted its worst day since May.

Trump said in a social media post he is considering a "massive increase" in tariffs on imports from China, adding "There is no way that China should be allowed to hold the World 'captive'" over rare earth exports.

His latest threat stems from accusations that China is imposing export controls on rare earths, slow-wa

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