Stocks, oil plunge again as China hits back after Trump tariffs

Global stock markets tumbled and oil prices dropped for a second day on Friday, with the Nasdaq Composite heading toward a bear market, as China struck back against US President Donald Trump's tariffs and worries mounted over a global trade war.

Data showing the US economy added far more jobs than expected in March did little to brighten the mood.

Responding to Trump's tariffs, China on Friday said it would impose additional levies of 34% on American goods, confirming investor fears that a full-blown global trade war is under way.

Trump on Wednesday slapped a 10% tariff on most US imports and much higher levies on dozens of countries, erecting the steepest trade barriers in more than 100 years.

"It's sort of the worst fears of where the tariff program was headed," said Rick Meckler, partner, 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."

Worries over a global recession drove US oil prices down 8%, while investors rushed towards the safety of government bonds and traders ramped up bets on rate cuts from the Federal Reserve and other major central banks.

Companies with exposure to China also fell. Apple, Nvidia and Amazon.com all were down sharply.

Bank shares dropped across the globe as fears of a recession increased. The S&P 500 financial index was down 5.1% on Friday.

The Dow Jones Industrial Average fell 1,230.72 points, or 3.04%, to 39,315.21, the S&P 500 fell 190.89 points, or 3.54%, to 5,205.34 and the Nasdaq Composite fell 604.27 points, or 3.59%, to 15,954.66.

MSCI's gauge of stocks across the globe fell 30.80 points, or 3.81%, to 776.84. The pan-European STOXX index was down 5.2%.

Japan's Nikkei 225 fell 2.8% overnight for a second session running.

US crude was down 8.5% at $61.24 a barrel and Brent fell to $64.77 per barrel, down 7.66% on the day.

The US dollar recovered against the euro and trimmed losses versus the yen on Friday, after the non-farm payrolls data. The dollar index was up 0.5% on Friday after having its biggest fall since November 2022 on Thursday.

Nonfarm payrolls increased by 228,000 jobs last month, while economists had forecast payrolls advancing by 135,000 jobs.

The euro was last down 0.47% against the dollar at $1.0998. Against the Japanese yen , the dollar weakened 0.4% to145.47.

After years of huge flows into US stocks and a booming American economy, investors are grappling with where to put their cash.

That helped drive a powerful rush towards government bond markets. The yield on the benchmark US 10-year Treasury note fell 12.2 basis points to 3.933% after falling to a six-month low of 3.86%. Yields move inversely to prices.

Traders are anticipating more accommodative policies from central banks. Money market futures were pricing in cumulative rate cuts of 110 basis points from the Federal Reserve by the end of this year, compared with about 75 bps a week earlier.

Traders increased their bets on Bank of England and European Central Bank reductions too.

"A lot of investors I've talked to have just said in this kind of environment, let's go to cash and just wait it out," Meckler said.