Stocks See Sharp Declines Amid Trade War Concerns

Updated April 04, 2025

10:32 AM EDT

Stocks in the U.S. markets experienced a significant downturn on Friday as fears of an escalating global trade war dominated investor sentiment. The Dow Jones Industrial Average fell by 3.4%, dropping almost 1,400 points shortly after the trading day commenced, while the S&P 500 and the tech-heavy Nasdaq Composite dipped 4% and 4.1%, respectively.

The latest dramatic losses follow an announcement from President Trump regarding new tariffs targeting U.S. trading partners, which has sparked widespread concern over the impact on corporate profits and economic stability. On Thursday, the major indexes experienced their largest single-day losses since 2020.

As this situation unfolds, China has retaliated with its own set of tariffs, imposing a 34% duty on all U.S. imports, matching Trump’s latest tariffs. This escalation in trade tensions is causing anxiety among investors regarding the potential for reduced economic growth and inflationary pressures.

Despite these troubling developments, stocks received a slight lift from a stronger-than-expected jobs report earlier in the day. The report indicated that 228,000 jobs were added in March, surpassing predictions of 140,000. The focus remains on remarks from Federal Reserve Chair Jerome Powell, who is expected to discuss the implications of tariffs on interest rates around 11:30 a.m. ET.

In more disconcerting news, shares of major technology firms continued to drop in early trading. Key players, including Nvidia and Tesla, reported declines of 6% and 8%, respectively. Furthermore, companies with significant manufacturing ties to China, such as Apple and Meta Platforms, also saw substantial losses.

• Chip manufacturers were particularly hard hit, with stocks like Intel and Micron falling by over 10%.
• Energy stocks suffered as oil prices reached a four-year low due to persistent global trade fears and overproduction.

Investors are urged to focus on market signals in the coming weeks as analysts assess the evolving trade situation between the U.S. and its trading partners, particularly China. How the current landscape will affect broader economic indicators remains to be seen.

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