US Stocks Set to Sink Again After China’s Retaliatory Tariffs

After suffering their worst day in five years on Thursday, U.S. stock markets are set for another steep drop on Friday as investors react to President Donald Trump’s aggressive tariff policies and China’s swift retaliation.

Both the S&P 500 and the Nasdaq were down nearly 3% in pre-market trading, signaling another difficult day for Wall Street. European markets also took a hit, with the Stoxx 600 tumbling 4.6%, while Japan’s Nikkei 225 and other global indexes saw significant losses.

China Strikes Back with New Tariffs

Early Friday morning, China announced a 34% tariff on all U.S. imports, marking a major escalation in the ongoing trade war. These tariffs, set to take effect on April 10, sent market losses spiraling further as investors reacted to the heightened economic uncertainty.

Market Reactions: A Flight to Safety

Thursday’s sell-off was the worst since the COVID market crash of March 2020, with the Russell 2000, the benchmark for small-cap stocks, now officially in bear market territory—down 20% from its recent highs.

As stocks plunge, investors are turning to safer assets. U.S. bonds and gold saw a sharp rise in early trading Friday, indicating growing concerns about economic stability.

Trump Unmoved by Market Reactions

Unlike his first term, when major market drops sometimes prompted him to reconsider policies, Trump’s second administration appears far less willing to reverse course on tariffs. The administration remains firm in its stance, even as economic experts warn that these measures could fuel inflation and slow growth.

With trade tensions intensifying and global markets in turmoil, all eyes are on Washington and Beijing to see what comes next.