Wall St dips on tariff worries, big banks kick off earnings season

Wall Street's main indexes dipped in choppy trading on Friday after China increased its tariffs on US imports, escalating a trade war that has hammered global markets in recent weeks, while investors assessed results from big Wall Street banks.

US consumer sentiment also deteriorated sharply in April and 12-month inflation expectations surged to the highest level since 1981 amid unease over escalating trade tensions.

The University of Michigan's Consumer Sentiment Index dropped to 50.8 this month from a final reading of 57.0 in March. Economists polled by Reuters had forecast the index falling to 54.5.

China retaliated after US President Donald Trump on Thursday doubled down on the country by increasing tariffs to an effective rate of 145%, even as he announced a 90-day tariff reprieve on most trading partners.

Stocks have been on a roller-coaster ride in response to tariff announcements in the past few days. Wall Street fell for four straight sessions, before bouncing back on Wednesday with the S&P 500 seeing its largest one-day percentage jump since October 2008.

Stocks, however, slumped again on Thursday and were more than 7% off from levels seen before last week, when Trump's "reciprocal" tariffs sparked the market rout.

Meanwhile, JPMorgan Chase gained 2.1% after beating first-quarter profit estimates, while Wells Fargo and Morgan Stanley slipped after reporting quarterly results.

Executives at the banks warned that sweeping tariffs could fuel risks and weigh on economic growth.

At 10:34am ET, the Dow Jones Industrial Average fell 121.88 points, or 0.31%, to 39,471.78, the S&P 500 lost 13.35 points, or 0.25%, to 5,254.70, and the Nasdaq Composite lost 38.74 points, or 0.24%, to 16,348.58.

Megacap and growth stocks were mixed, with Meta Platforms down 1.8% and Nvidia gaining 1.7%.

"A lot of de-risking has happened in the (tech) space and investors don't want to take too much risk of being too underweight in those areas," said Thomas Martin, senior portfolio manager at Globalt Investments.

The trading relationship between the US and China seems to be breaking down,

The CBOE Volatility index, seen as Wall Street's fear gauge, was last up 4.62 points to 45.34.

Still, all three major Wall Street indexes are set for robust weekly gains, with the Nasdaq set for its best weekly showing so far this year.

Investors sought refuge in traditional safe-haven assets such as gold , which jumped to a record high. Safe-haven currencies such as the Japanese yen and Swiss franc also strengthened against the dollar.

The rally in the precious metal lifted gold miners, with Newmont and US-listed shares of Barrick Gold rising more than 6% each.

US monthly producer prices unexpectedly fell in March, coming on the heels of a consumer prices reading which also showed an unexpected decline last month.

Declining issues outnumbered advancers for a 2.03-to-1 ratio on the NYSE and a 1.62-to-1 ratio on the Nasdaq.

The S&P 500 posted no new 52-week high and five new lows, while the Nasdaq Composite recorded nine new highs and 83 new lows.