US Stocks Fall for 2nd Straight Day After Global Tariff News

Meanwhile, the U.S. labor market has remained resilient.

A trader works on the floor of the New York Stock Exchange (NYSE) in New York City on April 4, 2025. Timonthy A. Clary/AFP via Getty Images

U.S. stocks fell for the second consecutive day on Friday after the Trump administration announced a series of global tariffs.

The Dow Jones Industrial Average dropped more than 2,200 points, or 5.5 percent. The blue-chip index registered a weekly loss of 8 percent and is down 10 percent this year.

The Nasdaq Composite Index, a tech-heavy benchmark, was down by about 950 points, or 5.8 percent. Year-to-date, it has dropped more than 18 percent and is approaching a bear market—a 20 percent decline from its record high.

The broader S&P 500 erased more than 300 points, 6 percent. It has dipped 13 percent this year and recently slipped into correction territory, which is defined as a 10 percent drop from its peak.

The Russell 2000, an index of small-cap stocks, fell 4 percent on Friday and was down 8.5 percent this week. It became the first U.S. stock benchmark to fall into a bear market.

U.S. Treasury yields fell as investors sought shelter. The benchmark 10-year declined toward 4 percent.

China’s Retaliation

The Chinese regime matched President Donald Trump’s April 2 tariffs.

This week, the U.S. president imposed 34 percent reciprocal tariffs on China, bringing the total rate to 54 percent.

China’s Ministry of Commerce then imposed 34 percent tariffs on U.S. goods entering China, effective April 10.

Beijing’s retaliatory levies were part of a plethora of other response measures. China announced export controls on several types of heavy and medium rare earth minerals, such as gadolinium, samarium, and terbium. The regime also added 11 U.S. firms to its “unreliable entities list.”

China’s Commerce Ministry said in a statement that the purpose of the export controls is to “better safeguard national security and interests, and to fulfill international obligations such as non-proliferation.”

Beijing also filed a complaint with the World Trade Organization, alleging that the United States is violating the institution’s rules.

Asian stocks also ended the trading week lower. Japan’s Nikkei 225 was down by about 1,000 points, or 2.75 percent. The Hang Seng Index plummeted 352 points, or 1.52 percent. The Shanghai Composite Index slipped 0.24 percent.

Federal Reserve Talks Tariffs

Federal Reserve Chair Jerome Powell said the national economy remains solid, but the president’s higher-than-expected tariffs pose risks of raising inflation and slowing economic growth.

Appearing at a conference of business journalists in Virginia on April 4, Powell said that the U.S. central bank is looking at a “highly uncertain outlook.”

“While tariffs are highly likely to generate at least a temporary rise in inflation, it is also possible that the effects could be more persistent,” Powell said in his prepared remarks.

“Avoiding that outcome would depend on keeping longer-term inflation expectations well anchored, on the size of the effects, and on how long it takes for them to pass through fully to prices.”

The president, shortly before Powell delivered his speech, urged the Fed chair to cut interest rates.

“This would be a perfect time for Fed Chairman Jerome Powell to cut interest rates,” Trump said in a post on social media platform X.

“He is always ‘late,’ but he could now change his image, and quickly,” Trump added. “Cut interest rates, Jerome, and stop playing politics!”

Investors expect the Fed to keep its easing cycle on hold at next month’s policy meeting. According to the CME FedWatch Tool, the futures market is predicting a quarter-point rate cut at the June meeting.

Powell said the Fed’s policy position is well-positioned and policymakers will wait for greater clarity. “It is too soon to say what will be the appropriate path for monetary policy,” he stated.

Digesting Jobs Data

The U.S. labor market has remained resilient amid market turbulence and economic policy changes.

According to the Bureau of Labor Statistics, the U.S. economy created 228,000 new jobs in March, up from the previous month’s downwardly revised 117,000. The unemployment rate rose to 4.2 percent from 4.1 percent.

The consensus forecasts suggested 130,000 new jobs and a jobless rate of 4.2 percent.

Last month, the private sector added a better-than-expected 155,000 new jobs, according to payroll processor ADP’s latest National Employment Report. While planned layoffs soared more than 275,000 in March, nearly 80 percent of the announced job cuts were in government, reports global recruitment firm Challenger, Gray, and Christmas.

“Job cut announcements were dominated last month by DOGE plans to eliminate positions in the federal government. It would have otherwise been a fairly quiet month for layoffs”, said Andrew Challenger, the firm’s senior vice president, in a statement.

In addition, the number of people filing unemployment benefits for the first time during a specific period fell. The Department of Labor reported that initial jobless claims declined by 6,000 to 219,000 for the week ending March 29.

Bill Adams, Comerica’s chief economist, said in a note to The Epoch Times that the stronger-than-expected jobs report doesn’t help much in easing the nerves of investors.

“The job market was well balanced, with decent trend job growth and an unemployment rate that was okay for workers as well as for employers,” Bill Adams, Comerica’s chief economist, said in a note to The Epoch Times.

“But the release provides little comfort with the stock market puking out the last year’s gains in the last two days.”

The widespread market decline could be near its peak, says Gina Bolvin, the president of Bolvin Wealth Management Group.

“We are closer to hitting peak uncertainty, total capitulation, and flat-out exhaustion. The average drawdown for the S&P 500 is about 14 percent over the last 70 years,” Bolvin said in a note emailed to The Epoch Times.