Stock markets experienced a significant decline on Friday, marking the largest one-day percentage drop for the S&P 500 and Nasdaq since April 10. The plunge was fueled by U.S. President Donald Trump’s statements that reignited concerns about a trade war with China.
Following the market closure on Friday, Trump announced plans to raise tariffs on Chinese exports to the U.S. to 100% and impose export controls on critical software in response to China’s restrictions on rare earth minerals. This announcement came after an earlier social media post by Trump hinted at additional tariffs on Chinese goods and the potential cancellation of a meeting with President Xi Jinping.
The news sent shockwaves through the markets, raising fears about the impact of the ongoing trade tensions on the U.S. economy. Trump’s tariff announcement on “Liberation Day” on April 2 had already triggered significant market volatility.
Tech-related stocks led the market decline, with the S&P 500 technology index dropping by four percent and semiconductor stocks falling by 6.3 percent. U.S.-listed Chinese companies also saw declines, with Alibaba Group Holding and JD.com Inc. shares plummeting. Oil prices dropped over $2 per barrel due to trade concerns, while spot gold rallied above $4,000 per ounce.
Market analysts expressed concerns about the uncertainties introduced by Trump’s latest actions, particularly as the market was already under scrutiny for potential overvaluation. At the close of trading, the Dow Jones Industrial Average was down 1.90%, the S&P 500 fell by 2.71%, and the Nasdaq Composite dropped by 3.56%.
Despite reaching record highs earlier in the week, the major U.S. stock indexes ended the week with losses, with the S&P 500 recording its largest weekly decline since May. Global stocks, as measured by MSCI, fell by 2.11%. European shares erased weekly gains in response to Trump’s comments, ending 1.25% lower.
U.S. Treasury yields hit multi-week lows as investors sought safe-haven assets following Trump’s statements. The U.S. dollar weakened against major currencies, with the euro and yen strengthening. Meanwhile, the yen rose against the dollar amid concerns about Japan’s interest rate policy.
In France, President Emmanuel Macron appointed Sebastien Lecornu as prime minister following his earlier resignation, which had caused a two percent drop in French blue-chip stocks during the week. U.S. crude oil prices settled at $58.90, while Brent crude settled at $62.73. Gold prices rose to $4,008.74 per ounce.
Overall, the market reaction to Trump’s trade war escalation and tariff threats against China led to widespread volatility across global markets, impacting various asset classes and currencies.
