Stock markets worldwide are careening even lower Friday after China matched President Donald Trump’s big raise in tariffs in an escalating trade war. Not even a better-than-expected report on the U.S. job market, which is usually the economic highlight of each month, was enough to stop the slide.
The S&P 500 was down 2.8% in early trading, coming off its worst day since COVID wrecked the global economy in 2020. The Dow Jones Industrial Average was down 1,049 points, or 2.6, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 3.2% lower.
So far there are few, if any winners, in financial markets from the trade war. European stocks saw some of the day’s biggest losses, with indexes sinking more than 3.5%. The price of crude oil tumbled to its lowest level since 2021. Other basic building blocks for growth, such as copper, also saw prices slide sharply on worries the trade war will weaken the entire global economy.
China’s response to U.S. tariffs caused an immediate acceleration of losses in markets worldwide. The Commerce Ministry in Beijing said it would respond to the 34% tariffs imposed by the U.S. on imports from China by imposing a 34% tariff on imports of all U.S. products beginning April 10. The United States and China are the world’s two largest economies.
Markets recovered some of their losses following Friday morning’s U.S. jobs report, which said employers accelerated their hiring by more last month than economists expected. It’s the latest signal that the U.S. job market has remained relatively solid through the start of 2025, and it’s been a linchpin keeping the economy out of a recession.
But that jobs data was backward looking, and the fear hitting financial markets is about what’s to come. Will the trade war cause a global recession? If it does, stock prices will likely need to come down even more than they have already. The S&P 500 is down nearly 15% from its record set in February.
Much will depend on how long Trump’s tariffs stick and what kind of retaliations other countries deliver. Some of Wall Street is still holding onto hope that Trump will lower the tariffs after negotiating with other countries to pry out some “wins.” Otherwise, many say a recession looks likely.
For his part, Trump has said Americans may feel “some pain” because of tariffs, but he has also said the long-term goals, including getting more manufacturing jobs back to the United States, are worth it. On Thursday, he likened the situation to a medical operation, where the U.S. economy is the patient.
“For investors looking at their portfolios, it could have felt like an operation performed without anesthesia,” said Brian Jacobsen, chief economist at Annex Wealth Management.
But Jacobsen also said the next surprise for investors could be how quickly tariffs get negotiated down. “The speed of recovery will depend on how, and how quickly, officials negotiate,” he said.
Vietnam said its deputy prime minister would visit the U.S. for talks on trade, for example, while the head of the European Commission has vowed to fight back. Others have said they were hoping to negotiate with the Trump administration for relief.
On Wall Street, stocks of companies that do lots of business in China fell to some of the sharpest losses.
GE Healthcare got 12% of its revenue last year from the China region, and it fell 17.9% for the largest loss in the S&P 500. United Airlines, which is in an alliance with Air China and got a third of its passenger revenue last year from flights across the Pacific, lost 8.1%.
DuPont dropped 12.1% after China said its regulators are launching an anti-trust investigation into DuPont China group, a subsidiary of the chemical multinational. It’s one of several measures targeting American companies and in retaliation for the U.S. tariffs.
In the bond market, Treasury yields continued falling sharply as worries rise about the strength of the U.S. economy and as expectations rise for the Federal Reserve to cut interest rates to cushion it.
The yield on the 10-year Treasury tumbled below 4% to 3.92% from 4.06% late Thursday and from roughly 4.80% early this year. That’s a major move for the bond market.
In stock markets abroad, Germany’s DAX lost 3.9%, France’s CAC 40 dropped 3.6% and Japan’s Nikkei 225 fell 2.8%.
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AP Writers Jiang Junzhe, Huizhong Wu and Matt Ott contributed.
Stock markets worldwide are careening even lower after China matched President Donald Trump’s big raise in tariffs in an escalating trade war.
HONG KONG – Global markets slid further and Wall Street was on track for another day of crushing losses Friday after China responded to U.S. President Donald Trump’s latest set of tariffs with some of their own.
Futures for the S&P 500 fell 3.6% before the bell, while futures for the Dow Jones Industrial Average shed 3.4%, falling below the 40,000 mark. Nasdaq futures tumbled 4%.
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That follows Thursday’s losses for the three major U.S. indices, which ranged between 4% and 6%. Thursday’s wipeout was Wall Street’s worst day in five years.
Markets in Europe were having an even rougher time Friday. By midday, Germany’s DAX had lost 5%, the CAC 40 in Paris slipped 4.2% and Britain’s FTSE 100 gave up 3.8%.
Oil prices fell as much as 8%.
China announced early Friday that it will impose a 34% tariff on imports of all U.S. products beginning April 10, part of a flurry of retaliatory measures following Trump’s “Liberation Day” slate of double-digit tariffs.
The new tariff matches the rate of the U.S. “reciprocal” tariff of 34% on Chinese exports Trump ordered this week.
The U.S. exports an array of goods to China, including machinery, soy, corn and aerospace products. Shares in companies that stand to suffer from China’s tariffs include Deere & Co., which fell 4.7% in premarket; and Boeing, which slid 6%.
Apple saw its shares decline 4.7%.
The Commerce Ministry in Beijing also said that it will impose more export controls on rare earths, which are materials used in high-tech products such as computer chips and electric vehicle batteries.
The Chinese government is also subjecting 27 additional U.S. companies to trade sanctions or export controls and filed a lawsuit with the World Trade Organization over the tariffs.
Everything from crude oil to Big Tech stocks to the value of the U.S. dollar against other currencies has fallen since Trump’s tariff announcement Wednesday afternoon. Even gold, a traditional safe haven that recently hit record highs, pulled lower.
Trump announced a minimum tariff of 10% on global imports, with the tax rate running much higher on products from certain countries like China and those from the European Union. Smaller, poorer countries in Asia were slapped with tariffs as high as 49%.
Economists say the tariffs increases the risk of a potentially toxic mix of weakening economic growth and higher inflation.
It’s “plausible” the tariffs altogether, which would rival levels unseen in more than a century, could knock down U.S. economic growth by 2 percentage points this year and raise inflation close to 5%, according to UBS.
Later Friday the U.S. government offers up its March jobs report.
Yields on Treasurys tumbled in part on rising expectations for coming cuts to rates, along with general fear about the health of the U.S. economy. The yield on the 10-year Treasury fell to 3.89% from 4.01% late Thursday and from roughly 4.80% in January. The last time it had fallen below 4% was in October.
U.S. benchmark crude oil shed $5.32 to $61.63 a barrel, its lowest level since mid-2021. Brent crude, the international standard, was down $5.26 at $64.88 a barrel.
Shares of Exxon Mobil slid 4.2% and Chevron fell an even 4%.
Markets in Shanghai, Taiwan, Hong Kong and Indonesia were closed for holidays, limiting the scope of Friday’s sell-offs in Asia.
Tokyo’s Nikkei 225 lost 2.8% to 33,780.58, while South Korea’s Kospi sank 0.9% to 2,465.42.
The two U.S. allies said they were focused on negotiating lower tariffs with Trump’s administration.
Australia’s S&P/ASX 200 dropped 2.4%, closing at 7,667.80.
In other trading early Friday, the U.S. dollar fell to 144.89 Japanese yen from 146.06. The yen is often used as a refuge in uncertain times, while Trump’s policies are meant in part to weaken the dollar to make goods made in the U.S. more price competitive overseas. The euro rose to $1.1074 from $1.1055.