- China’s 34% tariffs on U.S. goods, matching Trump’s Wednesday levy, triggered a sharp market sell-off, with Dow futures dropping 950 points (2.3%) and signaling a 1,500-point opening plunge after Thursday’s 1,679.39-point decline.
- Tech and industrial firms with China exposure led premarket losses – Apple and Tesla down 5%, Qualcomm and Caterpillar off 6%, and Nvidia falling 4% – while bank stocks like Morgan Stanley (down 5%) and Goldman Sachs (down 4.5%) slid amid recession fears.
- The S&P 500 futures lost 2.2% after a 4.84% drop, Nasdaq 100 futures fell 2.3%, and the 10-year Treasury yield dipped below 4% as JPMorgan raised its recession odds to 60% from 40%.
The stock market is bracing for a brutal Friday, with futures signaling a steep plunge as China’s retaliatory 34% tariffs on all U.S. products – announced by its commerce ministry – escalate fears of a full-blown trade war tipping the global economy into recession. Futures tied to the Dow Jones Industrial Average cratered 950 points, a 2.3% drop, pointing to an opening bell 1,500 points below Thursday’s close, which itself saw a punishing 1,679.39-point decline. The S&P 500 futures shed 2.2% after the benchmark hemorrhaged 4.84% the previous day, while Nasdaq 100 futures also fell 2.3%, reflecting the vulnerability of tech giants with deep ties to China’s market.
China’s tariff salvo mirrors the 34% levy on Chinese goods unveiled by President Donald Trump on Wednesday, a tit-for-tat escalation that has investors fleeing risk assets en masse. Michael Arone, SPDR chief investment strategist at State Street Global Advisors, captured the mood succinctly telling CNBC: “The Trump administration may be playing a game of chicken with trading partners, but market participants aren’t willing to wait around for the results.” This sentiment is evident in premarket trading, where companies tethered to China took a beating—Apple (AAPL) and Qualcomm (QCOM) slid 5% and 6%, respectively, Tesla (TSLA) dropped 5%, Caterpillar (CAT) lost 6%, and Nvidia (NVDA) dipped 4%. The sell-off underscores the market’s jittery reassessment of firms reliant on cross-border supply chains and consumer bases now caught in the tariff crossfire.
Bank stocks, often a gauge of economic health, mirrored the gloom as recession fears deepened. Morgan Stanley (MS) fell 5%, Goldman Sachs (GS) shed 4.5%, Citigroup (C) and JPMorgan Chase (JPM) each declined over 4%, and Wells Fargo (WFC) slipped 5% in premarket action. JPMorgan’s late Thursday update didn’t help, hiking its recession odds for the year to 60% from 40%, a stark signal that Wall Street sees storm clouds gathering. Meanwhile, the 10-year Treasury yield dipped below 4% as investors piled into bonds, driving prices up and yields down in a classic flight to safety. The tech-heavy Nasdaq’s 2.3% futures drop highlights the sector’s exposure, with firms like Qualcomm and Nvidia – key players in semiconductors – facing heightened risks from disrupted trade flows.
The broader picture reveals a market on edge, reeling from Thursday’s carnage and staring down another grim session. The Dow’s projected 1,500-point opening plunge would compound its 1,679.39-point loss, a one-two punch that could test the resilience of an already shaken investor base. China’s 34% tariff, a direct counterpunch to Trump’s Wednesday move, has turned a simmering trade spat into a high-stakes showdown, with the S&P 500’s 4.84% Thursday drop now looking like a prelude to further pain. Companies like Caterpillar, a bellwether for global industrial demand, and Apple, a consumer tech titan, are bleeding value as the reality of a 34% cost hike on U.S. goods sinks in. In this volatile climate, the market’s reaction – selling first, questioning later – reflects a profound uncertainty about where this trade war ends and what it means for an economy already showing cracks.
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