Wall Street suffered its worst collapse since the COVID-19 pandemic on Friday after China matched President Donald Trump’s sweeping tariff increases, triggering fears of a deepening trade war. The S&P 500 plunged 6 percent, the Dow Jones dropped 2,231 points, and the Nasdaq shed nearly 6 percent—marking the worst weekly decline since March 2020.
The dramatic fall followed China’s announcement of a 34 percent tariff on all U.S. imports, a direct response to Trump’s earlier tariff hike on Chinese goods. The tit-for-tat escalation between the world’s two largest economies has investors bracing for a potential global recession.
Energy and industrial stocks led the decline, with crude oil prices falling to their lowest levels since 2021 and copper prices sliding—both signs of weakening global demand. Only 14 companies in the S&P 500 saw gains Friday.
Markets briefly rebounded after the release of a stronger-than-expected U.S. jobs report, showing continued hiring strength. However, investor optimism faded quickly, as the report was viewed as backward-looking amid growing uncertainty about future economic conditions.
Federal Reserve Chair Jerome Powell warned that the tariffs could drive up inflation expectations, making the Fed reluctant to cut interest rates despite mounting economic pressure. “Our obligation is to keep longer-term inflation expectations well anchored,” Powell stated, signaling that rate cuts may not be imminent.
From Mar-a-Lago, Trump downplayed market fears, saying, “THIS IS A GREAT TIME TO GET RICH.” He defended the tariffs as part of a broader effort to restore American manufacturing and pressure countries like Vietnam and China into better trade terms.
DuPont shares dropped 12.7 percent after China launched an antitrust investigation into one of its subsidiaries. GE Healthcare, which relies heavily on Chinese revenue, fell 16 percent. Other major global indices, including Germany’s DAX and France’s CAC 40, also posted steep losses.
The S&P 500 is now down over 17 percent from its February record, with analysts warning that more declines could follow if the trade war intensifies. “The speed of recovery will depend on how, and how quickly, officials negotiate,” said Brian Jacobsen of Annex Wealth Management.
