The Blubber

U.S. stocks took a major hit Friday after China hit back at President Donald Trump’s tariffs, escalating a tit-for-tat trade war that’s rattling global markets.

The Dow plunged over 1,600 points, down roughly 4%. The S&P 500 dropped 4.7%, and the Nasdaq was slammed hardest, down 5.3%.

Wall Street had already been on edge over the trade war possibly tipping the U.S. and global economies into a recession. Analysts at JPMorgan warned Thursday that there was now a 60% chance of a recession both at home and worldwide. They added that the odds would rise further if countries retaliated against U.S. tariffs—and on Friday, China did just that. The move increases the chances of even more escalation and dims hopes for any kind of negotiated resolution.

“Markets might actually be underreacting here—especially if these tariffs stick,” said Matt Burdett, head of equities at Thornburg Investment Management. “The uncertainty and volatility these tariffs bring is unlike anything we’ve seen since the early pandemic days.”

Investors Friday were trying to make sense of all this while digesting unexpectedly strong jobs data. The U.S. added 228,000 jobs in March, blowing past February’s revised total of 117,000, according to numbers out from the Bureau of Labor Statistics.

Economists had forecast 130,000 new jobs and a slight rise in unemployment to 4.2%. But even the strong jobs report wasn’t enough to calm markets dominated by tariff fears.

“Unfortunately, no one’s paying attention to jobs anymore,” said Chris Zaccarelli, chief investment officer at Northlight Asset Management. “Tariffs and trade wars are driving the narrative now, and it looks like the U.S. is playing chicken with the world—risking a slide into global recession.”

Traders fled riskier bets, especially in tech stocks with major overseas supply chains that could soon face heavy tariffs. Apple (AAPL), which had already dropped more than 9% Thursday, slid another 4% Friday. Amazon (AMZN) was off 3%.

As futures cratered before the opening bell, Trump took to social media to reassure his base: “To the many investors coming into the United States and investing massive amounts of money, my policies will never change. This is a great time to get rich, richer than ever before!!!”

As stocks tanked, money rushed into safer assets like U.S. Treasuries and gold. The 10-year Treasury yield, which had briefly dipped below 4% Thursday for the first time since October, dropped further Friday as investors scrambled for protection. (Yields move inversely to prices.)

Gold, meanwhile, soared past $3,130 per troy ounce, setting a new record high. But other commodities got crushed. Oil dropped sharply again, with U.S. crude sinking 9% to under $62 a barrel. Brent, the global oil benchmark, slid 8%, as investors feared the trade war could slam the brakes on global demand.