US Stock Market Crashes: Dow Jones Sinks 2,200 Points, $5 Trillion Wiped Out Amid Trump-China Tariff War

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.

Also Read: Trump’s Tariffs Threaten Apple’s ‘Make In India’ Push, Raise iPhone Prices & Export Concerns

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?

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🇺🇸 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

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💬 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!”

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📈 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.

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📉 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

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📉 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

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🔁 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.

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🧾 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.

🏷️ Tags:
US stock market crash, Dow Jones, Nasdaq, S&P 500, Trump tariffs, China retaliation, global recession, Jerome Powell, interest rates, inflation, Nvidia stock fall, Apple shares drop, Wall Street, rare earth export ban, GDP contraction, tariff war, recession fears, Jerome Powell warning