Wall Street’s The worst crisis since Covid struck a high speed on Friday.
The S&P 500 lost 6% after China paired president Donald Trump Large increase in price Announced earlier this week. This decision increased the challenges of a trade war that could end with a recession that hurts everyone. Not even a better than expected report on the American labor market, which is generally the culminating economic point of each month, was sufficient to stop the slide.
The drop has closed the worst week for the S&P 500 since March 2020, when the pandemic has torn the world economy. The industrial average of Dow Jones plunged 2,231 points, or 5.5% and the NASDAQ composite released 5.8% to draw more than 20% below its record set in December.
The S&P / TSX composite index closed 1,142.30 points, or 4.7%, at 23,193.47 – more than 6% reduction compared to last week’s fence. It was led by loss of basic metal and energy actions, because the price of oil also dropped – the May oil contract of May was down US $ 4.96 to US $ 61.99 per barrel.
In the stock markets abroad, Germany Dax lost 5%, the CAC 40 of France fell by 4.3%and the Nikkei 225 of Japan dropped by 2.8%.
Until now, there have been few or no winners in the financial war markets. Actions for every 500 companies except 14 of the S&P 500 index fell on Friday. The price of crude oil has dropped to its lowest level since 2021. Other basic building blocks for economic growth, such as copper, have also seen prices sliding on the concerns that the trade war will weaken the global economy.
China’s response to American prices has caused immediate acceleration of losses on the world markets. The Beijing Ministry of Commerce said it would meet the 34% prices imposed by the United States on imports from China with its own 34% tariff on imports of all American products from April 10. The United States and China are the two world’s largest economies.
Trump on Wednesday evening announced prices on a large band of countries, although Canada has managed to escape all the new tasks on its goods.
You can read How the prices compare from the highest to the lowest here, And find out more about What pricing territories are uninhabited – or inhabited by penguins – here.
The markets briefly recovered some of their losses after the publication of the Friday morning American job report, which said that employers accelerated their hiring more last month than economists were planning. This is the latest signal that the labor market in the United States remained relatively solid until early 2025, and it was a hairdressing pin keeping the American economy outside a recession.
But these data on employment were behind, and the fear of hitting the financial markets concerns what will happen.
Get news from weekly money
Get expert information, questions and answers in markets, housing, inflation and personal finances provided to you every Saturday.
“The world has changed and economic conditions have changed,” said Rick Rieder, Director of Investments at Global Fixed Revenue in Blackrock.
Will the central question in the future: Will the trade war cause a global recession? If this is the case, the share prices may be more likely than they have already done. The S&P 500 is down 17.4% compared to its record established in February.
Trump seemed imperturbable. From Mar-A-Lago, his private club in Florida, he headed for his golf course a few kilometers after writing on social networks that “this is the ideal moment to become rich”.
The federal reserve could amortize the coup of the prices on the economy by reducing interest rates, which can encourage companies and households to borrow and spend. But the Fed may have less the freedom to move than it wishes.
The president of the FED, Jerome Powell, said on Friday that prices could ensure that inflation expectations. This could be more damaging than high inflation itself, because it can lead a vicious circle of behavior which only worsens inflation. American households have already said that they have softened strong increases in their invoices.
“Our obligation is to maintain long -term inflation expectations well anchored and to ensure that an ad hoc increase in price level does not become a current inflation problem,” said Powell.
This could indicate an hesitation in reducing rates, as lower rates can give more fuel to inflation.
Many will depend on the duration of Trump prices and the type of reprisals that other countries provide. A game of Wall Street manages the hope that Trump will reduce the prices after having secured the “victories” of other countries following negotiations.
Trump has given mixed signals on this subject. Friday, he said that Vietnam “wanted to reduce their prices to zero if they were able to conclude an agreement with the United States” Trump also criticized the reprisals of China, saying on his social platform of truth that “China has played badly, they panicked-the only thing they cannot afford to do!”
Trump said the Americans could feel “a certain pain” because of the prices, but also said that long-term goals, including to recover more manufacturing jobs in the United States, were worth it. On Thursday, he compared the situation to a medical operation, where the American economy is the patient.
“For investors who watch their portfolios, it could have looked like an operation carried out without anesthesia,” said Brian Jacobsen, chief economist at Annex Wealth Management.
But Jacobsen also said that the next surprise for investors could be the speed with which the prices are negotiated. “The recovery speed will depend on the way and the speed with which those responsible are negotiating,” he said.
In Wall Street, business actions that do a lot of business in China have come across some of the strongest losses.
Dupont fell 12.7% after China said its regulators launched an anti-trust survey on Dupont China Group, a chemical giant subsidiary. This is one of the many measures targeting American companies and in retaliation for American prices.
Ge Healthcare obtained 12% of its income last year in the Chinese region, and fell 16%.
All in all, the S&P 500 fell from 322.44 points to 5,074.08. The industrial average of Dow Jones fell from 2,231.07 to 38,314.86, and the composite Nasdaq dropped from 962,82 to 15587.79.
On the bond market, the yields of the Treasury fell, but they made their decreases following the prudent declarations of Powell on inflation. The yield on the 10 -year treasure fell at 4.01% against 4.06% Thursday evening and around 4.80% at the start of this year. He had exceeded 3.90% in the morning.
—The files of Global News’ Ari Rabinovitch and the Canadian Press