China’s retaliatory move to slap 34% tariffs on US goods starting April 10, matching President Donald Trump’s aggressive tariff hike earlier in the week.
The escalation of the trade war—despite signs of resilience in the US job market—sparked panic across asset classes, sending bond yields and oil prices tumbling.“The action within the market is shouting recession,” said Doug Ramsey, Chief Investment Officer at the Leuthold Group.
He noted that the selloff itself could become the final catalyst tipping the US economy into a downturn.
Federal Reserve Chair Jerome Powell acknowledged the risks of the trade war in a public address, saying tariffs could lead to “higher inflation and slower growth.”
However, he maintained a cautious stance on rate adjustments, opting for a wait-and-watch approach.
Market carnage on Friday
- S&P 500 fell 322.44 points, or 6%, to 5,074.08
- Dow Jones Industrial Average tumbled 2,231.07 points, or 5.5%, to 38,314.86
- Nasdaq Composite dropped 962.82 points, or 5.8%, to 15,587.79
- Russell 2000 slid 4.4% to 1,827.03
For the week, the Nasdaq is down 10%, S&P 500 is down 9.1%, and the Russell 2000 is down 9.7%. The Nasdaq has now plunged 22% from its peak, officially entering bear market territory.Experts urge caution, some see opportunity
Top market strategists are urging restraint.
Bank of America’s Michael Hartnett advised clients to “short risk assets” until Trump dials back his tariff agenda.
UBS’s Mark Haefele downgraded US equities to “neutral,” citing elevated recession risks.Nouriel Roubini, CEO of Roubini Macro Associates—known for predicting the 2008 crisis—believes the correction could deepen before a bottom forms. “Even if talks begin, the market likely corrects a bit more before stabilising,” he said.
Yet some on Wall Street see the current selloff as a buying opportunity.
Ed Yardeni, president of Yardeni Research, called the rout an overreaction. “A great buying opportunity is being created here,” he told Bloomberg TV, arguing that the market is clearly rejecting Trump’s tariff policy.
Investor Bill Gross echoed that sentiment on social media, noting that while the market remains volatile, “next week may present some opportunities” as leverage unwinds “without value considerations.”
Mega-caps, banks, China-exposed stocks hit hard
The selloff was broad-based, but megacaps led the decline. Nvidia and Tesla fell over 7%, while Apple, with heavy exposure to China, dropped 7% on Friday (April 4) alone.
Tesla shares have now halved from their peak.
US-listed Chinese tech giants Alibaba and Baidu also tumbled, while banks saw their worst day in months. The Cboe Volatility Index surged to its highest since April 2020.
Beyond wall street
Oil prices slid to a four-year low and haven currencies like the Japanese yen and Swiss franc gained ground.
Treasuries rallied, with 10-year yields falling to 3.99%.
Despite a strong US jobs report, investors seem convinced that aggressive trade policies will drag down global growth.
JPMorgan Asset Management’s David Lebovitz acknowledged that stocks are approaching “dip-buying territory” but warned that the market is still “fragile.”
–With inputs from Bloomberg and Reuters
