Stocks experienced significant declines on Friday, marking the largest one-day percentage drop for the S&P 500 and Nasdaq since April 10. This was accompanied by a decrease in Treasury yields and a weakening of the U.S. dollar due to remarks made by U.S. President Donald Trump that reignited concerns about a possible U.S.-China trade conflict.
Following the market’s closure on Friday, Trump announced the escalation of tariffs on Chinese exports to the U.S. to 100% and the implementation of export controls on critical software in response to China’s restrictions on rare earth minerals essential for technology and manufacturing. Earlier in the day, Trump hinted at additional levies on Chinese goods and threatened to cancel a meeting with President Xi Jinping.
These developments stirred uncertainty in the markets, sparking worries about the impact of the trade dispute on the U.S. economy. The announcement on April 2 regarding tariffs triggered significant market volatility. Technology-related stocks led the decline on Wall Street, with the S&P 500 technology index dropping by four percent and semiconductor stocks falling by 6.3%. U.S.-listed Chinese companies also saw declines, with Alibaba Group Holding and JD.com Inc. shares experiencing notable losses.
Oil prices dropped over $2 per barrel amid trade concerns affecting demand forecasts, while the price of spot gold surged past the $4,000 per ounce milestone. Market analysts expressed concerns about the sudden market shifts caused by Trump’s announcements, highlighting the fragility of the current market sentiment.
By the closing bell, the Dow Jones Industrial Average was down 878.82 points, the S&P 500 lost 182.60 points, and the Nasdaq Composite fell by 820.20 points. U.S. stock indexes had reached record highs earlier in the week, driven by expectations of further interest rate cuts and optimism surrounding AI-related deals.
Global stock markets also experienced declines, with MSCI’s global stock gauge dropping 2.11%. European shares erased weekly gains in response to Trump’s comments. U.S. Treasury yields hit multi-week lows as investors sought refuge in safe-haven assets following the market turbulence.
The U.S. dollar depreciated post-Trump’s statements, leading to strength in the euro and yen against the greenback. Meanwhile, currencies tied to commodities, such as the Australian dollar, faced declines. Concerns over excessive market volatility were raised by Japanese Finance Minister Katsunobu Kato.
In France, President Emmanuel Macron reappointed Sebastien Lecornu as prime minister, causing ripples in the markets. U.S. crude and Brent prices fell, while spot gold prices rose. The market reaction to Trump’s tariff threats against China underscored the ongoing uncertainty in global markets.