Highlights
Stocks plunged again Friday with losses accelerating into the close as investors continued to dump risky assets in response to recession and inflation fears spurred by President Trump's sweeping tariffs. The Dow Jones industrial average lost 5.5 percent, the S&P 500 dropped 6.0 percent, and the Nasdaq plunged 5.9 percent. US bond yields fell although they ended well above morning lows, and oil prices sank, while the dollar was mostly higher in a recovery from losses Thursday.
Stocks staged a modest recovery from the day's early lows after President Trump reportedly expressed a willingness to negotiate with Vietnam, a country hit especially hard by his tariffs, but the selling resumed in the afternoon and the major averages ended at the lows. The market reacted badly to news overnight that China had retaliated by imposing the same 34 percent tariff on all US goods as Trump imposed on Chinese goods. China's response, the biggest player to hit back so far, underscored investor worries that the trade war is just beginning, with unknowable negative consequences for business and the global economy.
Investors have been confused by conflicting signals coming from the Trump administration and its chaotic rollout of significant policy changes. The uncertainty has added to the negative dynamic in markets as no one can anticipate what will happen next. On Thursday, several members of the Trump cabinet said the tariffs announced Wednesday were not subject to adjustment or negotiation but Trump told reporters as he flew to Florida that he was ready to take calls from countries looking to negotiate.
The market appeared to largely shrug off the day's surprisingly positive employment report as old news, as it covered March, the period before the full shocking impact of the Trump tariffs and retaliation from China, Canada, and others. Markets also did not react favorably to an appearance by Federal Reserve Chairman Jerome Powell, who appeared to dismiss the possibility that the Fed would act quickly to boost the economy in the face of the tariff shock and the ensuing market meltdown. Powell said the economy and policy remained in a favorable position and the Fed would not rush to act until the situation and the outlook become clearer.
In the day's selloff, losses were across the board. Worst hit were financials, energy, industrials, materials, technology, consumer discretionary, and health care.
Stocks staged a modest recovery from the day's early lows after President Trump reportedly expressed a willingness to negotiate with Vietnam, a country hit especially hard by his tariffs, but the selling resumed in the afternoon and the major averages ended at the lows. The market reacted badly to news overnight that China had retaliated by imposing the same 34 percent tariff on all US goods as Trump imposed on Chinese goods. China's response, the biggest player to hit back so far, underscored investor worries that the trade war is just beginning, with unknowable negative consequences for business and the global economy.
Investors have been confused by conflicting signals coming from the Trump administration and its chaotic rollout of significant policy changes. The uncertainty has added to the negative dynamic in markets as no one can anticipate what will happen next. On Thursday, several members of the Trump cabinet said the tariffs announced Wednesday were not subject to adjustment or negotiation but Trump told reporters as he flew to Florida that he was ready to take calls from countries looking to negotiate.
The market appeared to largely shrug off the day's surprisingly positive employment report as old news, as it covered March, the period before the full shocking impact of the Trump tariffs and retaliation from China, Canada, and others. Markets also did not react favorably to an appearance by Federal Reserve Chairman Jerome Powell, who appeared to dismiss the possibility that the Fed would act quickly to boost the economy in the face of the tariff shock and the ensuing market meltdown. Powell said the economy and policy remained in a favorable position and the Fed would not rush to act until the situation and the outlook become clearer.
In the day's selloff, losses were across the board. Worst hit were financials, energy, industrials, materials, technology, consumer discretionary, and health care.
Definition
Market Reflections track market reaction to the trading day's major events. Economic data, policymaker speeches, and company news are featured in this report as well as key indexes and financial instruments.
Description
Understanding why markets respond as they do is fundamental for an investor. Market Reflections help explain how the day's events, news, and data impact the outlook for the economy and for market prices.
