Meanwhile, the US labor market was resilient.
U.S. stocks fall for the second day in a row on Friday after the Trump administration announced a series of global tariffs.
The Dow Jones industrial average fell by more than 2,200 points, or 5.5%. The Blue-chip index recorded a loss of 8% each week, down 10% this year.
The Nasdaq Composite Index, a highly tech benchmark, fell by around 950 points (5.8%). Since the start of the year, it has fallen by more than 18%, approaching the bear market. This is down 20% from the record high.
The wider S&P 500 eliminated over 300 points, 6%. This year I soaked 13% and recently slipped into the correction area. This is defined as a 10% drop from the peak.
The Russell 2000, a small-cap index, fell 4% on Friday and 8.5% this week. This became the first US equity benchmark to fall into the bear market.
China’s retaliation
The Chinese administration coincided with President Donald Trump’s tariffs on April 2.
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This week, the US president imposed a mutual tariff of 34% on China, increasing the total interest rate to 54%.
The Chinese Ministry of Commerce then imposed a 34% tariff on US goods that entered China on April 10th.
Beijing’s retaliation taxation was part of many other response measures. China has announced export controls for several types of heavy and moderate rare earth minerals, including gadolinium, samarium and terbium. The administration has also added 11 US companies to its “Untrusted Entities List.”
China’s Commerce Ministry said in a statement that the purpose of export control is to “more protect national security and interests and to fulfill international obligations such as non-proliferation.”
Beijing also filed a complaint with the World Trade Organization, claiming that the US is violating the agency’s rules.
Asian stocks closed trading week low. Japan’s Nikkei 225 fell by about 1,000 points, or 2.75%. The Hang Seng index plunged 352 points (1.52%). Shanghai’s composite index slipped by 0.24%.
The Federal Reserve speaks of tariffs
Federal Reserve Chairman Jerome Powell said the national economy remains solid, but tariffs that exceed the president’s expectations pose a risk that raises inflation and slows economic growth.
Powell, who appeared at a meeting of business journalists in Virginia on April 4, said the US Central Bank was considering “a very uncertain outlook.”
“While avoiding that outcome depends on fully fixing long-term inflation expectations, the magnitude of the effect, and the time it takes for them to pass fully to the price.”
The president urged the Fed Chairman to cut interest rates just before Powell gave his speech.
“This is the best time for Fed Chairman Jerome Powell to cut interest rates,” Trump said in a post on social media platform X.
“He’s always ‘slow’, but he can now change his image and he can change it right away,” Trump added. “Cut your interest rates, Jerome, and stop doing politics!”
Powell said the Fed’s policy position is well positioned and policymakers are waiting for clarity. “It will soon be a good path for monetary policy,” he said.
Job data digestion data
The US labor market remains resilient amidst the turbulence of markets and changing economic policy.
The consensus forecast suggested 130,000 new jobs and an unemployment rate of 4.2%.
“Last month, the announcement of the JobCut was dominated by a Doge plan to eliminate federal status. Otherwise it would have been a rather quiet month for the layoffs,” said Andrew Challenger, the company’s senior vice president, in a statement.
Comerica’s chief economist Bill Adams said in a memo to the Epoch Times that a stronger than expected employment report would not be of much help to ease investors’ nerves.
“The job market balance was very high, and job growth and unemployment rates were fine for workers and employers,” Comerica’s chief economist Bill Adams told the Epoch Times.
“However, this release is hardly comfortable with the stock market, which has stolen last year’s profits over the past two days.”
The widespread market decline could be near its peak, according to Gina Bolvin Wealth Management Group president.
“We are approaching hitting peak uncertainty, total yield and total fatigue. The average drawdown for the S&P 500 is around 14% over the last 70 years,” Volvin said in a memo emailed to the Epoch Times.
