- The U.S. stock market plunged to 8-month lows following tariff-driven tensions with China. The Dow Jones fell more than 1,400 points on Friday morning, while the S&P 500 and Nasdaq dropped more than 4%, continuing Thursday’s steep declines.
- China imposed 34% tariffs on U.S. goods, matching U.S. tariffs announced by President Trump. Additional measures included restricting rare earth mineral exports and suspending some U.S. agricultural imports.
- Despite the market turmoil, the U.S. reported strong job growth in March, adding 228,000 jobs. The unemployment rate ticked up slightly to 4.2%.
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Stocks continued a tariff-driven rout on Friday, March 4, as China plans to retaliate against U.S. tariffs. The Dow Jones Industrial Average opened down more than 1,000 points on the day after shedding nearly 1,700 points on Thursday, March 3.
The S&P 500 and the Nasdaq started the Friday trading day down more than 3% and quickly sank more than 4%. This compounded the stock market’s reaction from Thursday when the S&P 500 fell nearly 5% and the tech-heavy Nasdaq fell almost 6%.
The Dow Jones and S&P 500 each fell to 8-month lows. The Nasdaq dipped below 16,000, which it hasn’t done since May 2024.
Strong market reaction comes on news China is retaliating
China announced Friday it is retaliating against the U.S. by putting 34% tariffs on all U.S. imported goods. The 34% charge is the same tariff levied against Chinese goods announced by President Donald Trump on Wednesday, April 2, a day he dubbed “Liberation Day.” The 34% charge on Chinese goods is on top of the 20% tariff Trump previously imposed.
All U.S. imports will be subject to a 10% tariff starting April 5. The varying tariff levels calculated by trade deficits, like China’s 34%, will go into effect on April 9.
The “Liberation Day” tariffs sent the stock market diving on April 3, leading to the worst trading day since 2020. Friday’s continued rout comes as global retaliation on American goods and companies becomes clearer.
China’s specific targets
Aside from matching the U.S. tariffs of 34%, China’s Ministry of Commerce said it was adding 11 American companies to its “unreliable entities” list, which prevents them from doing business in China. The country also plans to restrict rare earth mineral exports which are critical for electric cars.
Tesla stock fell around 8% on Friday morning, while Rivian was down around 7%.
China also hit the U.S. agriculture industry, suspending some imports. The Trump administration has said other countries taking U.S. agricultural products is a priority in trade negotiations.
“The key is, will they take our agricultural products? Will they treat us fairly? Can they treat us fairly? And the answer is, over time, that is going to be yes,” U.S. Commerce Secretary Howard Lutnick recently told CNBC.
US labor market has strong month in March
The stock market largely ignored positive economic news that came out before the market opened on Friday. The U.S. added far more jobs than expected in March, indicating a resilient labor market before trade tensions.
The U.S. economy added 228,000 jobs in March, while the unemployment rate ticked up to 4.2% from 4.1%. Federal government employment declined 4,000 jobs for the month after dropping 11,000 jobs in February.
