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Trade war slams US indices; Nasdaq and Dow Jones fall about 4%
US stocks plunged on Friday amid a massive sell-off after China retaliated with new tariffs on US goods, sparking fears that a trade war would push the world into recession.
The Dow Jones Industrial Average traded down about 1,400 points, or 3.43%. This follows a 1,679.39-point drop on Thursday.
The Standard & Poor's 500 index fell 3.6% after the benchmark index fell 4.84% on Thursday.
The energy sector of the S&P 500 fell about 5.8% to its lowest level since January 2024.
The Nasdaq Composite Index fell 3.8%, as many technology companies have exposure to China. On Thursday, the Nasdaq fell 6%.
Trump's tariff announcements led to the worst day for markets since 2020. The S&P 500 fell nearly 14% from its February high on Thursday, sending the market back into correction territory.
The small-cap Russell 2000 also fell more than 6% on Thursday, becoming the first widely followed US stock index to enter a bear market, a drop of at least 20% from its previous peak.
Trump held firm in the face of the market backlash, posting on his Truth Social platform on Friday that his "policies will never change" and urged investors to increase their investments in the United States.
The Nasdaq Composite led the decline this week, falling 4.5% as the tariff plan prompted investors to reduce their risk exposure. The S&P 500 and Dow Jones Industrial Average also fell 3.3% and 2.5%, respectively, since the beginning of the week.
Both the Nasdaq and S&P 500 are on track for their worst weekly performance since September 2024, and their sixth consecutive week of declines over the past seven weeks.
