Dow Jones 'evaporates' another 2,200 points after Trump's historic tariffs

According to CNBC , the US stock market was hit hard by a sharp sell-off on Friday, April 4 (local time) after China retaliated with new tariffs on US goods. This raised concerns that President Donald Trump had ignited a global trade war that could lead to a recession.

The Dow Jones Industrial Average fell 2,231.07 points, or 5.5%, to 38,314.86 on Friday, its biggest drop since June 2020 during the COVID-19 pandemic.

The decline followed a 1,679-point drop on Thursday and marked the first time the Dow Jones Industrial Average fell more than 1,500 points for two consecutive days.

US stocks tumble after Trump's new tariff policy. (Photo: Apa)

The S&P 500 fell 5.97% to 5,074.08, its biggest drop since March 2020. The S&P 500 fell 4.84% on Thursday and is now down more than 17% from its recent high.

The Nasdaq Composite, which is home to many tech companies that sell to and manufacture there, fell 5.8% to 15,587.79. The Nasdaq Composite had earlier fallen nearly 6% on Thursday, leaving the index 22% below its record high in December.

The sell-off was broad-based, with only 14 members of the S&P 500 posting gains for the day. Major indexes closed at session lows.

China's commerce ministry said on Friday it would impose 34% tariffs on all US products, disappointing investors who had hoped countries would negotiate with Mr Trump before retaliating.

Tech stocks led the declines on Friday, with iPhone maker Apple falling 7%. Artificial intelligence leader Nvidia falling 7% in after-hours trading, while Tesla fell 10%.

All three companies have major operations in China and are among those hardest hit by Beijing's retaliatory measures.

Outside of tech, Boeing and Caterpillar — major exporters to China — led the Dow's decline, falling 9% and nearly 6%, respectively.

According to CNN , the Dow Jones closed in correction, down more than 10% from its record high in December. Sam Stovall, chief investment strategist at CFRA Research, said this was the first time the Dow Jones closed in correction since March 7, 2022.

The S&P 500 has lost $5.06 trillion in market value over the past two days, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. The benchmark index, which entered correction territory on Thursday, is down more than 10%.

Investors are concerned that a sharp escalation of the trade war could push the U.S. and global economies into recession. On Thursday, analysts at JPMorgan said there was a 60% chance that the U.S. and global economies would both fall into recession this year.

Lagerstroemia (Source: CNBC, CNN)

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