Extract from ABC News
Wall Street is continuing to drop after Donald Trump's latest move on tariffs. (AP Photo: Richard Drew)
In short:
S&P 500 companies have lost over $US4 trillion ($6.5 trillion) in stock market value after China matched President Trump's big raise in tariffs in an escalating trade war.
The Dow Jones Industrial Average plunged 2,054 points overnight in Wall Street's worst crisis since the COVID-19 crash.
What's next?
Meanwhile, Donald Trump was spotted playing golf in Mar-a-Lago after writing on his social media that "this is a great time to get rich".
Global stock markets and oil prices have tumbled again, as China struck back against US President Donald Trump's tariffs and worries mounted about a prolonged global trade war.
Wall Street nosedived for a second straight day on Friday, confirming the Nasdaq Composite was in a bear market — defined by falling prices of at least 20 per cent from a recent high — while the pan-European STOXX 600 index confirmed it was in a correction as the trade war fanned global recession concerns.
Since Trump unveiled his tariffs late on Wednesday, the Dow Jones Industrial Average plunged 2,054 points and S&P 500 companies have lost over $US4 trillion ($6.5 trillion) in stock market value.
It's a record two-day decline for the benchmark which exceeds the two-day loss of $US3.3 trillion in March 2020 when the pandemic ripped across global markets, according to LSEG data compiled by Reuters.
Some investors fled to the safety of government bonds, while the dollar recovered from Thursday's weakness.
Responding to Trump's tariffs, China on Friday said it would impose additional levies of 34 per cent on American goods, confirming investor fears that a full-blown global trade war is under way.
President Donald Trump waves as he arrives at the Trump International Golf Club after announcing widespread tariffs. (AP: Alex Brandon)
Trump slapped a 10 per cent tariff on most US imports and much higher levies on dozens of countries, erecting the steepest trade barriers in more than 100 years.
The United States and China are the world's two largest economies.
'This is a great time to get rich', says Trump
Two days after sending the economy reeling, President Donald Trump insisted his trade policies will never change.
Mr Trump headed to his nearby golf course at Mar-a-Lago, his private club in Palm Beach, after writing on social media that "THIS IS A GREAT TIME TO GET RICH".
President Donald Trump, driven by his son Eric Trump, arrives at Trump National Doral. (AP: Alex Brandon)
The president has often proved impervious to the kind of scandals or gaffes that would damage another politician, but his decision to spend the weekend at his gilded properties could test Americans' patience at a time when their retirement savings are evaporating along with the stock market.
The tariffs are expected to increase prices by thousands of dollars per year and slow economic growth, and there are fears about a potential recession.
Democrats called out Mr Trump for being in a "billionaire bubble," as Senator Chuck Schumer put it, while millions watched their investments sink.
"While the American people are trying to put food on the table, I see that Donald Trump's out there playing golf," said Senator Ben Ray Luján, a Democrat from New Mexico.
Few winners in trade war
So far there are few, if any, winners in financial markets from the trade war.
European stocks dropped roughly 5 per cent.
The price of crude oil tumbled to its lowest level since 2021.
Other basic building blocks for economic growth, such as copper, also saw prices slide on worries the trade war will weaken the global economy.
"It's sort of the worst fears of where the tariff program was headed," said Rick Meckler, partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey.
"For those investors who were sure it was just a negotiation — while that still may be true at some point — it's getting awfully deeper into the detail and more dangerous for companies."
Markets briefly recovered some of their losses after the release of Friday morning's US jobs report, which said employers accelerated their hiring by more last month than economists expected.
It's the latest signal that the UU job market has remained relatively solid through the start of 2025, and it's been a linchpin keeping the US economy out of a recession.
But that jobs data was backward looking, and the fear hitting financial markets is about what's to come.
"The world has changed, and the economic conditions have changed," said Rick Rieder, chief investment officer of global fixed income at BlackRock.
The central question is: Will the trade war cause a global recession?
If it does, stock prices will likely need to come down even more than they have already.
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