Wall Street Dips as China Hits Back with Tariffs, Consumer Sentiment Hits 15-Year Low

Wall Street’s main indexes dipped in volatile trading Friday after China fired back with increased tariffs on U.S. imports, intensifying a trade war that has already shaken global markets. The retaliation came a day after President Donald Trump raised tariffs to a punishing effective rate of 145 per cent on Chinese goods — even as he offered a temporary 90-day reprieve to other trade partners.

Markets Swing
The Dow Jones Industrial Average fell 121.88 points to 39,471.78, the S&P 500 lost 13.35 points to 5,254.70, and the Nasdaq slipped 38.74 points to 16,348.58. The CBOE Volatility Index — often dubbed Wall Street’s “fear gauge” — surged to 45.34, up over 4 points.

 

Banks Warn of Growing Economic Risks

JPMorgan Chase managed to beat first-quarter earnings expectations, rising 2.1 per cent, but its peers Wells Fargo and Morgan Stanley stumbled after reporting weaker results. Bank executives warned that escalating tariffs could pose serious threats to economic growth and market stability.

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Tech giants saw mixed reactions

The mounting tension sent a shockwave through investor sentiment. The University of Michigan’s Consumer Sentiment Index plunged to 50.8, its lowest level since the 2008 financial crisis, with 12-month inflation expectations soaring to levels not seen since 1981.

Gold Soars, Safe Havens Shine
Spooked investors rushed into traditional safe havens. Gold surged to an all-time high, lifting shares of Newmont and Barrick Gold by more than 6 per cent. Meanwhile, the Japanese yen and Swiss franc gained ground against the U.S. dollar. Despite the volatility, all three major indexes are still on track for strong weekly gains, with the Nasdaq poised for its best week of 2025 so far.

Tariff Storm Far From Over
As tit-for-tat tariffs continue to rock global trade, the road ahead for markets remains uncertain. With declining stock breadth and a fragile consumer outlook, the economic fallout from this trade war could reverberate far beyond Wall Street.