US: Markets tumble with S&P 500 down 5% and Dow down 1,600; Trump says 'some pain' is worth it

Global stock markets plunged Friday after China retaliated against the US with steep new tariffs, intensifying a trade war that investors fear could tip the world into recession. Despite a strong US jobs report, panic selling swept Wall Street and Europe, as investors braced for what many now see as an economic reckoning.
The S&P 500 nosedived 5% in morning trading, on track for its worst day since the pandemic crash in 2020. The Dow Jones Industrial Average plunged 1,656 points, or 4.2%, while the tech-heavy Nasdaq tumbled 5.5%. Crude oil prices sank to 2021 levels, and industrial metals like copper dropped on worries of slowing global growth.
The sell-off accelerated after China announced it would match President Donald Trump’s 34% tariff hike on Chinese imports with its own 34% tariffs on all US goods, effective April 10. The tit-for-tat escalation comes just a day after Trump warned Americans might feel “some pain” from his trade strategy, comparing the economic disruption to surgery.
“For investors looking at their portfolios, it could have felt like an operation performed without anesthesia,” said Brian Jacobsen, chief economist at Annex Wealth Management.
The US jobs report provided a brief pause to the carnage. Employers added more jobs than expected in March, reinforcing hopes that the US economy remains resilient. But analysts warned the data is backward-looking and does little to address forward risks.
“Markets are now focused on what comes next. This is no longer about how strong the US was—it’s about whether it can withstand a trade war-induced slowdown,” said Rick Rieder, Chief Investment Officer of Global Fixed Income at BlackRock.
Some of the sharpest losses were among US companies exposed to China. DuPont fell nearly 17% after China’s regulators launched an anti-trust probe into its Chinese subsidiary. GE Healthcare, which gets 14% of its revenue from China, sank 13.3%. United Airlines, heavily reliant on Asia-Pacific routes, dropped 12.6%.
On his social media platform Truth Social, Trump dismissed China’s move: “CHINA PLAYED IT WRONG, THEY PANICKED – THE ONE THING THEY CANNOT AFFORD TO DO!”
Bond markets also flashed red. The 10-year Treasury yield slid to 3.90%, down from 4.06% the previous day, as investors bet the Federal Reserve may be forced to cut interest rates to cushion the blow.
But with tariffs driving up prices, the Fed could face a tightrope: lower rates may ease economic pressure but risk stoking inflation, leaving US households squeezed by rising costs.
Abroad, the damage was widespread. Germany’s DAX index fell 5.2%, France’s CAC 40 lost 4.6%, and Japan’s Nikkei shed 2.8%.
Vietnam and the European Union have both signaled intentions to negotiate with the US, but for now, the world’s two largest economies remain locked in economic combat — and markets are running scared.