Stocks on Wall Street suffered another strong sell-off on April 4, with major indexes plunging more than 5% after President Donald Trump's newly imposed tariffs, AFP reports.
US stocks spent the entire session in the red, shrugging off solid employment data and focusing on China's swift retaliation against US levies.
The broad-based S&P 500 led the major indices lower, ending at 5,074.08, down 6% on the day and more than 9% on the week.
The Nasdaq technology index plunged 5.8 percent to 15,587.79, putting it in a bear market (a term used for a sharp decline) defined as a 20 percent drop from a recent high.
The Dow Jones industrial average plunged 5.5 percent to 38,314.86 points, its first close below 40,000 since August.
Losses widened somewhat after remarks by Federal Reserve (Fed) Chairman Jerome Powell, who warned of the risk of higher unemployment and higher inflation due to the tariff increase, which he described as "significantly larger than expected."
Government data showed the US economy added 228,000 jobs last month, far more than analysts expected.
Markets, however, focused on China's announcement that it is imposing 34 percent tariffs on U.S. imports, while introducing controls on exports of seven rare earths.
"Essentially we have an escalating trade war," said Jack Ablin of Cresset Capital. "If these tariffs stay in place, we're at the beginning of a global slowdown."
All 11 sectors of the S&P 500 fell, while the Dow was overwhelmingly a sea of red, with Apple down 7.3 percent, Chevron down 8.2 percent and Boeing down 9.5 percent.
However, there were a few stocks that recovered.
Nike and Lululemon Athletica rose 3 percent or more after Trump spoke optimistically about trade talks with Vietnam, where both companies import apparel. Apparel importers were among the hardest-hit sectors on April 3.
Homebuilders were another bright spot in light of falling mortgage rates as markets bet on monetary easing. Lennar rose 2.4% and KB Home rose 3.5%. | BGNES
