It's the latest dizzying swing in a whirlwind week as investors recalibrate - again and again - how anxious to be about a possible trade war and a more aggressive Federal Reserve.
"When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win", Trump said.
Investors had a different impression. The president of the European Union's governing body suggested possible tariffs on blue jeans and motorcycles.
The Dow was down 470 points, or 1.9 percent, at 24,554. The S&P 500 fell 30.45 points, or 1.1 percent, to 2,713.83, while the Dow Jones industrial average lost 380.83, or 1.5 percent, to 25,029.20 and the Nasdaq composite dropped 57.35, or 0.8 percent, to 7,273.01.
"I view almost every one of Trump's actions through a negotiation lens", he said.
There yields fell despite new Fed chair, Jerome Powell giving a clear indication the Fed will be proactive in lifting interest rates this year. And U.S. companies are heavily reliant on global trade, which means investors in U.S. stocks have only recently begun feeling the full benefit. S. steel companies and manufacturers were under pressure on uncertainty over the effects of tariffs.
A "trade war is in no one's interests", said Roberto Azevedo, head of the World Trade Organization. Apple, the most valuable US company, got 63 percent of its sales from outside the United States in its latest fiscal year.
The Standard & Poor's 500 is on pace to close out another week with a sharp loss, and the index is now down for the year even though it just had its best January in two decades.
Earlier in the week, Powell's testimony helped send Treasury yields jumping and stocks tumbling when he said that he's feeling more optimistic about the economy. Some traders took that as a signal that the Fed may raise rates more quickly than expected. Gold usually rises when fears about inflation are climbing. The yield on the 10-year Treasury note sank to 2.81 percent from 2.86 percent late Wednesday.
Patterson Companies fell to the biggest loss in the S&P 500 after it reported weaker earnings for the latest quarter than analysts expected and said that its chief financial officer was leaving.
McDonald's stock dropped on fears that its value menu isn't drumming up much in sales, and an analyst at RBC Capital Markets cut his expectations for the chain's sales in the United States.
The shares quietly rose more than 5 percent on the week, closing at yet another record.
The dizzying result marked a sharp turnaround from the market's blistering start to the year, when stocks jumped on expectations that corporate profits would keep rising and the global economy would keep strengthening.
Japan's benchmark Nikkei 225 lost 2.8 percent to 21,109.44 and South Korea's Kospi slid 1.5 percent to 2,391.81. Heavy equipment maker Caterpillar lost $3.12, or 2 percent, to $151.54 and aerospace giant Boeing gave back $8.59, or 2.4 percent, to $353.70. It is down 3.9 percent for February but still up 1.5 percent in 2018.
COMMODITIES: Benchmark U.S. crude fell 47 cents to $60.52 per barrel. IXIC added 23.09 points, or 0.32 percent, to 7,203.66.
The April gold contract was up US$18.20 to US$1,323.40 an ounce and the May copper contract was unchanged to US$3.12 a pound. The index had five losses of 1 percent or more in February, more than it did in all of previous year. The euro inched up to $1.2207 from $1.2203, and the British pound slipped to $1.3732 from $1.3771.