Trade war escalation leads to global market losses, S&P 500 down 6%, Dow down 2,200.

From Yahoo Finance: 2025-04-03 23:29:00

Wall Street faced a crisis as the S&P 500 plunged 6% on Friday, matching China’s response to President Trump’s tariff increase. The trade war escalation raised fears of a recession, despite a positive U.S. job report. Stocks dropped, with the S&P 500 experiencing its worst week since March 2020.

China’s retaliatory tariffs accelerated global market losses. The U.S. imposed 34% tariffs on Chinese imports, prompting China to respond with its own 34% tariffs on all U.S. products. Concerns over economic growth led to declines in oil and copper prices.

Markets briefly recovered after a strong U.S. job report, but fears persist about the economic impact of the trade war. The potential for a global recession looms, with the S&P 500 down 17.4% from its record high. The Federal Reserve may cut interest rates to mitigate tariff effects.

Fed Chair Jerome Powell warned that tariffs could heighten inflation expectations, leading to increased consumer costs. The fear of ongoing inflationary pressures may deter rate cuts. The duration of the trade war and global responses will influence future market outcomes.

President Trump’s tariffs prompted market turmoil, with stocks falling and businesses facing uncertainty. The hope is for negotiations to reduce tariffs quickly. Trump’s mixed signals suggest a volatile future, as the U.S. economy braces for potential repercussions.

Companies reliant on Chinese business suffered losses, with DuPont and GE Healthcare impacted by China’s anti-trust probe and retaliatory measures. Global stock markets dropped, with Germany’s DAX, France’s CAC 40, and Japan’s Nikkei 225 all experiencing significant declines.

In the bond market, Treasury yields fell initially but stabilized after Powell’s remarks on inflation. The 10-year Treasury yield decreased to 4.01%, reflecting market uncertainty amid escalating trade tensions. The potential for ongoing inflation concerns may impact future rate decisions.

Read more: Markets plunge with S&P 500 down 6% and Dow down 2,200 after China retaliates against Trump tariffs