Wall Street braced for another punishing session Friday as stocks took a nosedive following China’s announcement of steep counter-tariffs, intensifying fears of an all-out global trade war in response to President Trump’s recently announced “Liberation Day” levies.
The Dow Jones Industrial Average tumbled nearly 1,000 points within minutes of the market opening, coming on the heels of Thursday’s staggering 1,679-point plunge—the worst single-day performance since the early days of the COVID-19 crisis in 2020.
Technology stocks also faced a massive selloff, with the Nasdaq slumping roughly 500 points, or 2.3%, at the open. The S&P 500 wasn’t far behind, shedding about 130 points, a 2.4% decline.
Markets around the world mirrored the sharp downturn, as traders grew increasingly concerned that Trump’s retaliatory tariff plan—which includes a 10% general import tax and steeper rates for specific nations—could fuel inflationary pressures and drag the global economy into a recession.
Despite mounting anxiety, the White House continued to push a message of confidence in the president’s approach to trade.
“To anyone on Wall Street this morning, I would say trust in President Trump,” press secretary Karoline Leavitt said in an interview on CNN.
“This is a president who is doubling down on his proven economic formula from his first term… this is indeed a national emergency… and it’s about time we have a president who actually does something about it.”
Even a better-than-expected jobs report failed to offset market panic. Before trading began, new data showed U.S. employers added 228,000 jobs in March—well above forecasts, which ranged between 50,000 and 185,000.
Still, investor optimism was short-lived after China’s finance ministry declared it would introduce a 34% tariff on all American imports beginning April 10—just one day after Trump’s sweeping 54% reciprocal tariffs are set to kick in.
Earlier this year, the U.S. slapped a 20% tariff on Chinese goods, and Trump escalated the situation further on Wednesday by announcing that rate would jump by an additional 34%.
The across-the-board 10% tariff is scheduled to begin shortly after midnight on Saturday. Meanwhile, even harsher rates—20% on EU products, 24% on goods from Japan, and 17% on Israeli imports—are expected to take effect on April 9. Trump has indicated that this window provides an opportunity for negotiation.
However, the hope for diplomatic talks did little to ease investor nerves.
The CBOE Volatility Index, widely regarded as Wall Street’s primary fear barometer, surged to its highest reading since August 2024.
“We’re beginning to see the inevitable retaliation from the global trade partners of the United States. The risk is that this tips a recession scare into a full-blown recession,” said Ben Laidler, head of equity strategy at Bradesco BBI.
With the specter of rising prices and a slowdown in global growth looming, the tariffs have sparked fears of a broader economic slump in the world’s largest consumer economy.
U.S. banking stocks were hit hard as the trading day continued. Globally, financial institutions also suffered losses amid predictions of further interest rate cuts by central banks and declining economic momentum due to the tariff battle.
Shares of major U.S. banks, including Bank of America, JPMorgan Chase, and Citigroup, each dropped around 5%. The yield on 10-year Treasury notes fell to 3.95%, marking its lowest point in six months.
Attention is now shifting to a scheduled speech by Federal Reserve Chair Jerome Powell at 11:25 a.m. ET, with investors eager for any signals about the future direction of monetary policy.
Markets appear to be betting on a looser approach from the Fed. Futures suggest that traders now expect interest rates to be cut by a full 100 basis points before the year’s end—up from 75 basis points just one week ago.
“Looking at cross-asset reactions, the market is actually pricing in the real risk of a recession here,” Laidler said.
{Matzav.com}