US Market Bloodbath Worsens as China Strikes Back with 34% Tariffs on American Goods

New York: On Friday, Wall Street faced its most significant crisis since the COVID-19 pandemic, escalating dramatically. The S&P 500 saw a 6% drop after China mirrored President Donald Trump's hefty tariff increase announced earlier in the week. This move raised the stakes in an ongoing trade conflict, potentially pushing the global economy into a recession. Even a stronger-than-expected US job report, which typically boosts market sentiment, couldn't prevent the downward trend.

Market Continues to Collapse in USA, Check List of Key Companies

The decline marked the worst week for the S&P 500 since March 2020, when the pandemic wreaked havoc on the global economy. The Dow Jones Industrial Average plummeted by 2,231 points (a 5.5% loss), and the Nasdaq composite fell 5.8%, now down over 20% from its December peak.

Also Read: Wall Street Shaken: Trade War Sparks 1500-Point Dow Dive, Nasdaq Tanks 4%

The ongoing trade war has largely been a losing situation for most financial markets. On Friday, stocks of all but 14 companies within the S&P 500 index dropped, while crude oil prices fell to their lowest levels since 2021. Other key economic indicators, such as copper prices, also suffered as concerns grew that the trade conflict could weaken the global economy.

China's Retaliation Accelerates Losses in Global Markets

China's retaliation to US tariffs accelerated the losses in global markets. The Chinese Commerce Ministry announced it would impose a 34% tariff on all US imports starting April 10, in response to similar tariffs imposed by the US on Chinese goods. As the world's two largest economies, any escalation between the US and China raises significant concerns about the global economic outlook.

Trump also mentioned that Vietnam "wants to cut their tariffs down to ZERO if they can make an agreement with the US" and criticized China's retaliation, claiming that “CHINA PLAYED IT WRONG, THEY PANICKED - THE ONE THING THEY CANNOT AFFORD TO DO!”

‘This Is A Great Time To Get Rich’: Donald Trump As US Market Continues to Bleed

President Trump seemed unaffected by the market turmoil, tweeting from his Mar-a-Lago club in Florida that "THIS IS A GREAT TIME TO GET RICH," before heading out to his golf course nearby.

Despite acknowledging that tariffs might cause some short-term pain for Americans, Trump has maintained that the long-term benefits, such as bringing more manufacturing jobs back to the US, justify the temporary hardships. He likened the situation to a medical operation, where the US economy is the patient.

Companies With Chinese Exposure Suffer Biggest Losses

Companies with significant exposure to China suffered some of the steepest losses. DuPont’s stock dropped 12.7% after China launched an anti-trust investigation into its subsidiary in China, a retaliatory measure against US tariffs. GE Healthcare, which derives 12% of its revenue from China, saw its stock fall by 16%.

The S&P 500 ended the day down 322.44 points, closing at 5,074.08. The Dow Jones Industrial Average dropped by 2,231.07 points to 38,314.86, and the Nasdaq composite fell 962.82 points to 15,587.79.

Internationally, markets also experienced declines, with Germany's DAX falling 5%, France's CAC 40 dropping 4.3%, and Japan's Nikkei 225 down by 2.8%. In the bond market, Treasury yields dropped, though they recovered somewhat after Powell’s cautious remarks on inflation. 

The yield on the 10-year Treasury fell to 4.01%, down from 4.06% the previous day and from around 4.80% earlier this year, after dipping below 3.90% in the morning.

(Inputs from AP)