US markets tumble as China turns up the heat on US

Wall Street took another beating Friday as China escalated its response to U.S. tariffs, sending shockwaves through global markets and sparking fears that a full-blown trade war could tip the economy into recession.

Beijing announced sweeping new tariffs on American goods, a 34% levy on all goods imported, in retaliation to the actions by US President Donald Trump earlier in the week. The move intensified concerns that China is digging in for a prolonged economic faceoff with the U.S., one that could have deep repercussions for multinational companies and consumers alike.

The Dow Jones Industrial Average plummeted more than 1,600 points, or 4%, on Friday and is on course to cap the week with a brutal two-day slide that began with Thursday’s 1,679-point drop. The S&P 500 tumbled another 5%, adding to Thursday’s 4.8% decline and pushing the benchmark more than 15% below its recent peak. The tech-heavy Nasdaq Composite fell 4% Friday.

China's retaliation didn’t stop at tariffs. The commerce ministry added several American firms to its "unreliable entities list," accusing them of breaching market rules. It also launched an antitrust probe into DuPont, sending the chemical giant’s shares crashing 12%.

Tech stocks were among the hardest hit. Apple slid over 4%, extending its weekly loss to 10%. Nvidia and Tesla fell 7% and 9%, respectively, as investors dumped companies with significant ties to Chinese manufacturing or sales.

The bond market reflected the rising anxiety. The yield on the 10-year Treasury fell back below 4% as investors sought safety, pushing bond prices higher. JPMorgan, reflecting the growing unease, revised its recession odds for 2025 up to 60% from 40%. US Federal Reserve Chairman Jerome Powell at an interaction with journalists at the Society for Advancing Business Editing and Writing Annual Conference, Arlington, Virginia, said, “We face a highly uncertain outlook with elevated risks of both higher unemployment and higher inflation.”

Despite the market turmoil, Trump struck a defiant tone on social media, insisting his “policies will never change” and urging investors to double down on America.

Back home, the tariff war has singed the BSE Sensex and NSE Nifty with the indices coming off 1.5% to end the week on a new low.