US stock extended their selloff on Friday after Fed Chair Jerome Powell warned that the economic fallout from the escalating trade war could be worse than expected, while fears of a trade war rattled markets. The S&P 500 sank nearly 6%, the Dow plunged 2,230 points, and the Nasdaq lost 5.8%, hitting their lowest levels since last May. Powell cited rising risks of inflation and slower growth, while reaffirming a cautious, wait-and-see stance on rate cuts. Market anxiety grew after China’s finance minister announced a 34% tariff on all U.S. imports, mirroring President Trump’s move on Wednesday. Economists warned of higher prices, weaker growth, and a potential recession, despite stronger-than-expected payroll data. Losses were broad-based, with energy leading the decline, followed by financials, tech, and industrials. Tech giants like Apple (-5.9%), Microsoft (-3.5%), Nvidia (-7.4%), Amazon (-4.1%), Meta (-5%), Alphabet (-3.4%), and Tesla (-10.4%) experienced steep declines.
Frankfurt's DAX extended early losses and plunged 5% to close at 20,642 on Friday, its biggest daily decline since Russia's invasion of Ukraine in February 2022, as trade-war tensions escalated. China announced today it plans to impose 34% tariffs on all U.S. goods starting April 10, retaliating against sweeping tariffs imposed by President Trump. Meanwhile, the European Commission announced that it is preparing its own countermeasures. Trump’s latest action includes a 10% tariff on all imports, with significantly higher rates for certain countries, such as a 20% levy on EU goods. Most sectors were under pressure, particularly banks, with Deutsche Bank and Commerzbank plunging 9.5% and 5.9%, respectively. Other notable decliners included tech companies, basic resources, retailers and auto stocks. Only defensive sectors, such as real estate and food and beverages, posted gains. The index was declined about 7.8% this week.
