US stock market today: Wall St tailspin worsens as S&P 500 plunges six per cent in wake of Trump tariffs

Wall Street has nosedived for a second straight day, with the Nasdaq Composite confirming a bear market and the Dow Jones Industrial Average entering a correction, as an escalating global trade war spurred the biggest losses since the COVID pandemic.

The S&P 500 plummeted six per cent on Friday, the Dow Jones Industrial Average plunged 5.5 per cent and the Nasdaq composite dropped 5.8 per cent.

The fallout from US President Donald Trump’s sweeping tariffs stoked fears of a global recession, wiping more than $US4 trillion of value from US companies. Declines on indexes were the heaviest since the pandemic during Trump’s first term.

The Nasdaq Composite’s slide confirmed a bear market for the tech-heavy index, compared to its record closing high of 20,173.89 on December 16.

Meanwhile, the Dow Jones Industrial Average confirmed a correction to its record closing high of 45,014.04 on December 4.

Since late on Wednesday, when Trump boosted tariff barriers to their highest level in more than a century, investors have dumped stocks, fearing both the new US economic reality and also how US trading partners might retaliate by steepening their own trade barriers.

The CBOE Volatility index, or Wall Street’s fear gauge, hit its highest level since August.

China’s finance ministry said it would impose additional tariffs of 34 per cent on all US goods from April 10.

Markets then dropped further on talks between the prime ministers of Britain, Australia and Italy on how to respond to Trump’s tariff salvo.

“Right now, how bad it gets depends on how committed the administration is to this set of policies which, clearly, the market is voting again,” said Steve Sosnick, chief strategist at Interactive Brokers.

Trump seemed unfazed. From Mar-a-Lago, his private club in Florida, he headed to his golf course after writing on social media that “THIS IS A GREAT TIME TO GET RICH.”

According to preliminary data, the S&P 500 lost 322.72 points to end at 5,073.80 points, while the Nasdaq Composite lost 962.82 points to 15,587.79. The Dow Jones Industrial Average fell 2,237.52 points to 38,314.49.

Earlier, investment bank JP Morgan said it was forecasting a 60 per cent chance of the global economy entering a recession by year-end, up from 40 per cent previously.

Federal Reserve Chair Jerome Powell spoke publicly for the first time since Trump’s tariff announcement. Powell highlighted that the unexpectedly hefty tariffs could trigger higher inflation and slower growth, setting the stage for challenging decisions for US central bankers.

Traders still anticipated a more accommodative Fed policy, with money market futures pricing in cumulative rate cuts of 100 basis points by the end of 2025, compared with about 75 bps a week earlier.

Safe-haven buying in the bond market sent the yield on the benchmark 10-year Treasury notes to touch a six-month intraday low.

This pushed US bank stocks down further, with the sector under pressure globally, as the prospect of interest rate cuts from central banks and a hit to economic growth from tariffs would crimp profitability. The S&P Banks index dropped.

All 11 S&P sectors were down significantly, with energy the leading laggard for the second straight day, as companies tracked a 7.3 per cent decline in US crude prices.

US-listed shares of Chinese companies dived, including JD.com and Alibaba and Baidu.

Companies with exposure to China also fell across the board, with mega-caps such as Apple dropping.

The chipmakers index sank once again. The sector is particularly vulnerable to both China and US tariffs as many chip companies design their chips in the US, but have them manufactured in China, potentially hitting them with a double-whammy of levies.