Markets reel as China slaps 34% retaliatory tariffs on US goods; Dow, S&P 500, and Nasdaq face worst week since pandemic-era crash. Powell raises inflation alarm as Trump urges rate cut.
April 5, 2025: The US stock market plummeted on Friday in its worst week since March 2020, after China hit back with 34% tariffs on all US imports—a retaliatory move to President Donald Trump’s sweeping “reciprocal tariffs”. Major indices including the Dow Jones, Nasdaq, and S&P 500 crashed over 5%, wiping out over $5 trillion in market value.
The Dow Jones Industrial Average sank 2,231 points (5.5%), while the S&P 500 dropped 6%, and the Nasdaq Composite lost 5.8%, officially entering correction territory.
Tech stocks led the bloodbath with Nvidia dropping 7.2%, Apple tumbling 4.72%, and significant losses reported for Goldman Sachs, JPMorgan, and Boeing.
Also Read: Global Markets Crash: Is a US Recession Unavoidable After Trump’s Tariff Blitz?
🇺🇸 Trump’s Trade War Triggers Panic
- On April 2, Trump announced a 10% baseline tariff on all imports, with even higher rates for key trading partners:
- China: 34%
- India: 26%
- EU: 20%
- In response, China retaliated with its own 34% tariff on all US imports, effective April 10, and restricted the export of rare earth elements critical for US electronics and defense sectors.
Also Read: Trump Enters Trade Talks with India, Israel & Vietnam as Tariff Deadline Looms
💬 Trump Doubles Down
In a flurry of Truth Social posts, Trump gloated:
“This is a great time to get rich—richer than ever before! My policies will never change.”
He also urged Fed Chair Jerome Powell to “cut interest rates” immediately:
“CUT INTEREST RATES, JEROME, AND STOP PLAYING POLITICS!”
📈 Powell Pushes Back
Federal Reserve Chair Jerome Powell raised a red flag, warning the tariffs could result in:
- Higher inflation
- Slower growth
- “Significantly larger-than-expected” economic impact
“We are well positioned to wait for greater clarity,” Powell said, resisting Trump’s pressure for immediate rate cuts.
📉 Recession Fears Intensify
- JPMorgan slashed its 2025 US GDP forecast to -0.3%, down from 1.3%, citing tariff headwinds.
- Unemployment is expected to rise to 5.3% from 4.2%
- Economists warn of a broader global recession if tit-for-tat tariffs escalate
📉 Sector Impact and Top Losers
S&P 500 Laggards:
- APA Corp., EQT Corp., Freeport-McMoRan, GE Healthcare
Nasdaq Worst Performers:
- Virpax Pharmaceuticals, NeuroOne, Medirom Healthcare, QuantaSing Group
Dow Jones Losers:
- Apple, Nvidia, Boeing, Goldman Sachs, Caterpillar, Visa, Salesforce
🔁 Vietnam’s Surprising Offer?
In a potential silver lining, Trump claimed Vietnam’s ruling party is considering “zero tariffs” for US goods, hinting at future negotiations.
“To Lam told me Vietnam wants to cut tariffs to ZERO. I look forward to a meeting,” Trump said.
🧾 Final Word
As markets brace for further volatility, the global economic balance teeters between geopolitical trade chess and monetary policy. With $5 trillion already erased and investor confidence shaken, the next moves by the Fed and China will be critical.
Stay tuned for LIVE updates on this evolving story.
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