A trader works on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., April 3, 2025.
Brendan McDermid | Reuters
The stock market was headed for another pounding Friday after China retaliated with new tariffs on U.S. goods, raising fears a trade war will tip the globe into a recession.
Futures tied to the blue-chip Dow Jones Industrial Average lost 1,200 points, or 3%. Futures levels indicated the Dow would open official trading about 1,500 points lower. This follows a 1,679.39 point decline on Thursday. S&P 500 futures lost 3% after the benchmark shed 4.84% on Thursday.
Nasdaq 100 futures dropped 2.8% as many tech companies have exposure to China.
China’s commerce ministry said Friday the country will impose a 34% levy on all U.S. products. This matches the tariff on Chinese goods coming into the U.S. unveiled by President Donald Trump on Wednesday.
“The Trump administration may be playing a game of chicken with trading partners, but market participants aren’t willing to wait around for the results,” said Michael Arone, SPDR chief investment strategist at State Street Global Advisors. “Investors are selling first and asking questions later.”
Companies with large exposure to China led declines in premarket trading with Apple and Qualcomm down 5% and 6%, respectively. Tesla lost 5% and Caterpillar shed 6%. Nvidia fell about 4%.
Bank stocks tumbled in the premarket as worries of a U.S. economic slowdown grew. Morgan Stanley dropped 5%, while Goldman Sachs shed 4.5%. Citigroup and JPMorgan Chase each slid more than 4%, while Wells Fargo dipped 5%.
The 10-year Treasury yield fell back below 4% Friday as investors flooded into bonds for safety, pushing prices up and rates lower. JPMorgan late Thursday raised the odds of a recession this year to 60% from 40%.
Dow, 5 days
The escalation comes after the U.S. duties announced by Trump sent stocks to their worst day since 2020. The S&P 500 fell back into a correction Thursday with it down about 12% from its February all-time high. The small-cap focused Russell 2000 dove more than 6%, the first widely followed measure of U.S. stocks to enter a bear market, or a decline of at least 20% from its last peak.
The Nasdaq Composite has led the way lower for stocks this week, falling 4.5% as the tariff plan drove investors to reduce their risk exposure. The S&P 500 and Dow Industrials have slipped 3.3% and 2.5%, respectively, week to date. Both the Nasdaq and S&P 500 are tracking for their worst weekly performances since September 2024 and sixth negative week of the last seven.
The closely watched jobs report for March gave investors a mixed picture of the U.S. economy. Nonfarm payrolls increased by 228,000 last month, while economists polled by Dow Jones forecast an increase of 140,000. The unemployment rate inched up to 4.2%, compared to estimates that called for the figure to hold steady at 4.1%.