Extending the nosedive seen over the course of the previous session, stocks showed another substantial move to the downside during trading on Friday. With the continued sell-off, the Nasdaq and the S&P 500 plunged to their lowest closing levels in eleven months.
The major averages ended the session just off their worst levels of the day. The S&P 500 plummeted 322.44 points or 6.0 percent to 5,074.08, the Nasdaq dove 962.82 points or 5.8 percent to 15,587.79 and the Dow tumbled 2,231.07 points or 5.5 percent to 38,314.86.
The tech-heavy Nasdaq is now down more than 20 percent from its record high in December, which is considered a bear market in Wall Street terminology.
The extended nosedive on Wall Street came amid ongoing concerns about a global trade war after China announced retaliatory tariffs on U.S. goods in reaction to President Donald Trump's new levies.
China's finance ministry announced a 34 percent tariff will be imposed on all imported goods originating from the U.S. beginning on April 10th.
The new tariff matches the "reciprocal tariff" Trump plans to impose on China, although the country will face a 54 percent effective rate when the new levies are combined with existing duties.
The ministry called Trump's tariff plan a "typical unilateral bullying practice" that is "inconsistent with international trade rules."
"China urges the United States to immediately cancel its unilateral tariff measures and resolve trade differences through consultation in an equal, respectful and mutually beneficial manner," the ministry said, according to a Google translation.
Responding to the news in a post on Truth Social, Trump argued China "played it wrong" and "panicked," calling the move "the one thing they cannot afford to do."
Canada and the European Union are also purportedly preparing countermeasures, leading to concerns about a trade war that could fuel inflation and damage the global economy.
Federal Reserve Chair Jerome Powell said in remarks at a business journalist conference that it will very difficult to assess the likely economic effects of the higher tariffs until there is greater certainty about the details.
However, Powell said it is becoming clear that the tariff increases will be significantly larger than expected and the same is likely to be true of the economic effects, which will include higher inflation and slower growth.
Citing the highly uncertain outlook due in part to Trump's new tariffs, Powell indicated the central bank will wait for greater clarity before considering any adjustments to interest rates.
Meanwhile, traders largely shrugged off a typically closely watched Labor Department report showing employment in the U.S. surged by much more than expected in the month of March.
Sector News
With the crude of oil plummeting to its lowest levels in over three years, energy stocks saw substantial weakness on the day, dragging the Philadelphia Oil Service Index and the NYSE Arca Oil Index down by 11.2 percent and 8.7 percent, respectively.
Gold stocks also moved sharply lower amid a nosedive by the price of the precious metal, with the NYSE Arca Gold Bugs Index plunging by 9.5 percent.
Significant weakness was also visible among semiconductor stocks, as reflected by the 7.6 percent slump by the Philadelphia Semiconductor Index.
Natural gas, financial and computer hardware also saw considerable weakness amid another broad-based sell-off on Wall Street.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Friday, with markets in Hong Kong and mainland China closed for a holiday. Japan's Nikkei 225 Index dove by 2.8 percent, while Australia's S&P/ASX 200 Index slumped by 2.4 percent.
The major European markets also showed substantial moves to the downside. While the French CAC 40 Index tumbled by 4.3 percent, the U.K.'s FTSE 100 Index and the German DAX Index both plunged by 5.0 percent.
In the bond market, treasuries extended the spike seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slid 7.0 basis points to a six-month closing low of 3.985 percent.
Looking Ahead
Developments on tariff front may impact trading early next week, while reports on consumer and producer price inflation and consumer sentiment and inflation expectations are likely to attract attention later in the week.
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Business News
April 11, 2025 14:54 ET Some key economic data were released during the week though the focus remained on the escalation of the global tariff war. Inflation data and minutes of the latest Fed policy session were the main news out of the U.S. In Europe, trade data from Germany was among the key reports released. In Asia, consumer price data from China gained attention, while India’s central bank was in focus as it announced the latest interest rate decision.