XPost: misc.invest.stocks, or.politics, talk.politics.guns
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US stocks were battered by a steep sell-off Friday after China retaliated against the United States for President Donald Trump’s tariffs in a tit-for-tat that escalates a global trade war.

The Dow plunged by 2,231 points, or 5.5%. The broader S&P 500 was 5.97% lower. The tech-heavy Nasdaq Composite was 5.82% lower.

The Nasdaq closed in a bear market for the first time since 2022, down more than 20% from its record high in December.

The Dow closed in correction, down more than 10% from its record high in December. It is the first time the Dow has closed in correction since March 7, 2022, according to Sam Stovall, chief investment strategist at CFRA Research. The Dow posted its
biggest back-to-back losses since March 2020, during the onset of the Covid-19 pandemic.

The S&P 500 shed $5.06 trillion in market value across the past two days, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. The benchmark index, which entered correction Thursday, sank more than 10% over the past two days.

Investors have been fearful that a dramatic escalation of a trade war could plunge the US and global economies into a recession. JPMorgan analysts said Thursday that America’s economy and the broader world economy both had a 60% chance of sinking into
a recession this year. The analysts also said odds of a recession would rise if countries began to retaliate against the United States — and China did so Friday. Retaliation raises the risk of further escalation and could diminish hopes for negotiation.

“Markets may actually be underreacting, especially if these rates turn out to be final, given the potential knock-on effects to global consumption and trade,” said Matt Burdett, head of equities at Thornburg Investment Management. “The tariffs have
injected a level of uncertainty and volatility we haven’t seen since the early days of the pandemic.”

US stocks briefly rallied from their lowest point of the morning after Trump posted on social media that he had a “very productive call” with To Lam, the general secretary of the Communist Party of Vietnam.

“[Lam] told me that Vietnam wants to cut their Tariffs down to ZERO if they are able to make an agreement with the U.S. I thanked him on behalf of our Country, and said I look forward to a meeting in the near future,” Trump said.

Nike (NKE), which slumped Thursday, rallied 3%. Nike relies extensively on international supply chains and imports from Vietnam, where many of its factories are located.

Yet stocks eventually slid back near their lows of the day as investors grappled with the extent of Trump’s tariffs and the potential for a slowdown in economic growth. Federal Reserve Chair Jerome Powell said during prepared remarks Friday that
inflation could remain elevated because of Trump’s tariffs.

“While uncertainty remains elevated, it is now becoming clear that the tariff increases will be significantly larger than expected. The same is likely to be true of the economic effects, which will include higher inflation and slower growth,” said
Powell, who spoke at an event just outside Washington, DC. “The size and duration of these effects remain uncertain.”

Tariff anxiety roils Wall Street
Investors Friday morning wrestled with tariff anxiety while also digesting fresh data that showed stronger-than-expected job growth in March. The US economy added 228,000 jobs in March, a significant increase from February’s revised gains of 117,000,
according to Bureau of Labor Statistics data released Friday.

While job growth beat expectations, tariff angst continues to drive market sentiment.

“Unfortunately, the market is no longer focused on the jobs market and focused squarely on tariffs and trade wars as the US plays chicken with the rest of the world, potentially beginning a downward spiral into a worldwide recession,” said Chris
Zaccarelli, chief investment officer at Northlight Asset Management.

Economists expect that the US added 130,000 jobs in March and that the unemployment rate would increase to 4.2%

Traders ditched risky stocks, especially tech companies whose products are manufactured overseas and could soon be subject to enormous tariffs. Apple (AAPL), which tumbled more than 9% Thursday, was down another 7.3% Friday.

As stock futures tumbled ahead of the opening bell, Trump posted on social media, “To the many investors coming into the United States and investing massive amounts of money, my policies will never change. This is a great time to get rich, richer than
ever before!!!”

Wall Street’s fear gauge, the Cboe Volatility Index, or VIX, surged 50%. “Extreme fear” was the sentiment driving markets, according to CNN’s Fear and Greed index, which slumped to its lowest level this year as investors braced for an escalating
global trade war.

And as investors sold stocks, they poured money into traditional safe havens, including government bonds. The 10-year Treasury yield, which briefly fell below 4% Thursday for the first time since October, fell firmly below 4% Friday as investors bought
bonds to insulate themselves from a potential economic downturn. Bond prices and yields trade in opposite directions.

Gold prices surged above $3,130 a troy ounce Friday morning, setting another record, before sliding to around $3,030. Gold has soared this year as investors seek out safe havens.

Investors ditched other commodities, including oil, out of fear that the trade war could send the global economy into a recession. US oil, which plunged nearly 7% Thursday, tumbled another 7.4% to $61.99 a barrel. Brent oil futures, the global benchmark,
fell 6.5%. Both US oil and the global benchmark settled at their lowest level since 2021.

https://www.cnn.com/2025/04/04/investing/stock-market-dow-tariffs/index.html?iid=cnn_buildContentRecirc_end_recirc

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