The Dow Jones dropped 2,000 points on Friday afternoon as stocks continue to plunge in the wake of President Donald Trump’s tariff announcement and China’s retaliation.
Investors appeared to be spooked by the impacts of Trump’s tariffs and China’s retaliatory 34 percent tariffs on U.S. goods in response. The Dow opened Friday at a 1,000-point loss. European markets also took a hit Friday, with stocks falling more than 4 percent. The NASDAQ is also on track to fall 20 percent or more below its recent peak by closing Friday.
On Thursday, Wall Street saw a historically bad day. The Dow saw a point drop that ranked in the top five worst of all time. The NASDAQ also suffered its largest one-day point drop in that market’s history, while the S&P 500 saw its biggest one-day drop since March 2020 amid the COVID-19 pandemic.
The dollar fell sharply Thursday too, and is now near its weakest level of the year.
Trump announced 10 percent blanket tariffs on all countries — except for Russia — on Wednesday. Some 60 countries were labeled as the “worst offenders” — including China, Vietnam and Japan — and will face face vastly higher reciprocal levies.
Federal Reserve Chair Jerome Powell said that Trump’s tariffs are likely to raise inflation and slow economic growth on Friday morning. Powell said he believes the economy is currently “solid” but empathizes with those feeling uncertain in the face of the recent mark drops.
“I realize that the uncertainty is high,” he said. “I understand the uncertainty that's weighing on people.”
The president said it is necessary to make it fair for American manufacturers and return jobs to America. However, experts have said his plan could have a massive negative impact on the economy.
JPMorgan’s Chief Economist Bruce Kasman said the investment bank now sees a 60 percent chance of the global economy entering recession in 2025, up from 40 percent.
When asked how the tariffs are going amid the market decline, Trump resonded: “I think it's going very well. It was an operation. I like when a patient gets operated on and it's a big thing.”
Secretary of State Marco Rubio similarly defended the tariffs, claiming Friday he’s confident the markets will bounce back.
“Businesses around the world, including in trade and global trade, they just need to know what the rules are,” Rubio said from a NATO meeting in Brussels. “Once they know what the rules are, they will adjust to those rules.”
“I don’t think it’s fair to say economies are crashing,” he continued. “Markets are crashing because markets are based on the stock value of companies who today are embedded in modes of production that are bad for the United States.”
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