Specialist Michael Pistillo works on the floor of the New York Stock Exchange, Friday, April 4, 2025. (AP Photo/Richard Drew)
NEW YORK – The worldwide sell-off for financial markets is slamming into an even higher, scarier gear.
The S&P 500 tumbled 5.7% Friday, the Dow Jones Industrial Average plunged 2,100 points and the Nasdaq composite dropped 5.7%. Markets are facing their worst crisis since the COVID crash 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 price of oil slid to its lowest level since 2001.
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 4%. The price of crude oil tumbled to its lowest level since 2021. Other basic building blocks for economic growth, such as copper, also saw prices slide on worries the trade war will weaken the 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 briefly recovered some of their losses after the release of 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 U.S. economy out of a recession.
But that jobs data was backward looking, and the fear hitting financial markets is about what’s to come.
“The world has changed, and the economic conditions have changed,” said Rick Rieder, chief investment officer of global fixed income at BlackRock.
The central question is: 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.
