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Wall Street’s worst crisis since COVID-19 slammed into a higher gear Friday.

 in tariffs announced earlier this week. The move increased the stakes in 

 that could end with a recession that hurts everyone. Not even a 

 on the U.S. job market, which is usually the economic highlight of each month, was enough to stop the slide.

The drop closed the worst week for the S&P 500 since March 2020, when the pandemic ripped through the global economy. The Dow Jones Industrial Average plunged 2,231 points, or 5.5 percent and the Nasdaq composite tumbled 5.8 percent to pull more than 20 percent below its record set in December.

So far there have been few, if any, winners in financial markets from the trade war. Stocks for all but 14 of the 500 companies within the S&P 500 index fell Friday. 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 percent tariffs imposed by the U.S. on imports from China with its own 34 percent 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 looking ahead is: Will the trade war cause a global recession? If it does, stock prices may need to come down even more than they have already. The S&P 500 is down 17.4 percent from its record set in February.

. From Mar-a-Lago, his private club in Florida, he headed to his golf course a few miles away after writing on social media that “THIS IS A GREAT TIME TO GET RICH.”

The Federal Reserve could cushion the blow of tariffs on the economy by cutting interest rates, which can encourage companies and households to borrow and spend. But the Fed may have less freedom to move than it would like.

 said Friday that tariffs could drive up expectations for inflation. That could prove more damaging than high inflation itself, because it can drive a vicious cycle of behavior that only worsens inflation. U.S. 

 they’re bracing for sharp increases to their bills.

“Our obligation is to keep longer-term inflation expectations well anchored and to make certain that a one-time increase in the price level does not become an ongoing inflation problem,” Powell said.

That could indicate a hesitance to cut rates because lower rates can give inflation more fuel.

Much will depend on how long Trump’s tariffs stick and what kind of retaliations other countries deliver. Some of Wall Street is holding onto hope that Trump will lower the tariffs after prying “wins” from other countries following negotiations.

Trump has given mixed signals on that. On Friday, he said Vietnam “wants to cut their Tariffs down to ZERO if they are able to make an agreement with the U.S.” Trump also criticized China’s retaliation, saying on his Truth Social platform that “CHINA PLAYED IT WRONG, THEY PANICKED - THE ONE THING THEY CANNOT AFFORD TO DO!”

 because of tariffs, but he has also said the long-term goals, including getting more manufacturing jobs back to the United States, are worth it. On Thursday, he 

likened the situation to a medical operation

“For investors looking at their portfolios, it could have felt like an operation performed without anesthesia,” said Brian Jacobsen, chief economist at Annex Wealth Management.

But Jacobsen also said the next surprise for investors could be how quickly tariffs get negotiated down. “The speed of recovery will depend on how, and how quickly, officials negotiate,” he said.

On Wall Street, stocks of companies that do lots of business in China fell to some of the sharpest losses.

DuPont dropped 12.7 percent after China said its regulators are launching an anti-trust investigation into DuPont China group, a subsidiary of the chemical giant. It’s one of several measures targeting American companies and in retaliation for the U.S. tariffs.

GE Healthcare got 12 percent of its revenue last year from the China region, and it fell 16 percent.

All told, the S&P 500 fell 322.44 points to 5,074.08. The Dow Jones Industrial Average dropped 2,231.07 to 38,314.86, and the Nasdaq composite fell 962.82 to 15,587.79.

In stock markets abroad, Germany’s DAX lost 5 percent, France’s CAC 40 dropped 4.3 percent and Japan’s Nikkei 225 fell 2.8 percent.

In the bond market, Treasury yields fell, but they pared their drops following Powell’s cautious statements about inflation. The yield on the 10-year Treasury fell to 4.01 percent from 4.06 percent late Thursday and from roughly 4.80 percent early this year. It had gone below 3.90 percent in the morning.

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Wall Street’s worst crisis since COVID-19 slammed into a higher gear. The S&P 500 plummeted 6 percent Friday, the Dow Jones Industrial Average plunged 5.5 percent and the Nasdaq composite dropped 5.8 percent. The losses came after China matched President Donald Trump’s big raise in tariffs announced earlier this week.

Traders on the floor of the New York Stock Exchange

Markets plunge after China retaliates against Trump tariffs

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