Wall Street faces another brutal beating on Friday as stocks plunged after China unveiled stiff retaliatory taxes in response to Trump’s “Liberation Day” tariffs – threatening a global trade war.
The Dow Jones Industrial Average was down nearly 1,000 points shortly after the opening bell — a day after suffering a 1,679 drop, its worst session since the start of the COVID-19 pandemic in 2020.
The tech-heavy Nasdaq stumbled out of the gate by about 500 points, or 2.3%, while the broad-based S&P 500 was down 130 points, or 2.4%.
Global stock markets also continued on a descent as investors fear that Trump’s reciprocal tariff plan – a 10% baseline tax and much harsher rates for many nations – could stoke inflation and even a recession.
The White House urged investors to stick behind Trump’s policies.
‘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.’
The Wall Street selloff continued despite a bit of good news before markets opened as nonfarm payrolls for March came in much higher than expected.
Employers added 228,000 jobs, beating estimates ranging from 50,000 to 185,000.
But the positive jobs data couldn’t overcome growing fears after China’s finance ministry on Friday said it will impose a 34% levy on all US imports starting on April 10 — the day after Trump’s reciprocal tariff totaling 54% goes into effect
The White House had already hit Chinese exports with a 20% levy earlier this year before Trump announced he was hiking that duty by 34% on Wednesday.
The 10% across-the-board tax is set to take effect after midnight on Saturday, while the higher rates – including a 20% tariff on the 27-nation European Union, 24% on Japan and 17% on Israel – won’t take hold until April 9, which Trump has signaled gives countries time to come to the negotiating table.
However, the potential for rates to be negotiated downward didn’t do enough to quell markets.
The CBOE Volatility index, known as Wall Street’s fear gauge, hit its highest level 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.
The tariffs have fueled expectations for a global economic downturn and sharp price hikes across sectors in the world’s biggest consumer market.
Bank stocks in the United States dropped further on Friday, with the sector under pressure globally as investors anticipated more interest rate cuts from central banks and a hit to economic growth from tariffs.
Bank of America, JPMorgan Chase and Citigroup all fell around 5% each. The yield on the benchmark 10-year Treasury notes was down to a six-month low of 3.95%.
The focus will also turn to Fed Chair Jerome Powell’s speech at 11:25 a.m. ET for clues on the path of interest rates.
Traders continued to anticipate a more accommodative policy from the central bank, with money market futures pricing in cumulative rate cuts of 100 basis points by the end of this year, compared with about 75 bps a week earlier.
“Looking at cross-asset reactions, the market is actually pricing in the real risk of a recession here,” Laidler said.
With Post wires
