President Donald Trump’s tariffs wreaked havoc in the stock market this week, stoking fears of a trade-war escalation that could lead to a recession.
U.S. stocks showed signs of “capitulation,” or a move toward “panic selling,” on Friday, with steeps drops in major benchmarks that included a big selloff across all 11 of the S&P 500’s sectors, said Anthony Saglimbene, chief market strategist at Ameriprise, in a phone interview.
The Dow Jones Industrial Average
plunged 2,231.07 points on Friday, or 5.5%, finishing the week in correction territory while the technology-heavy Nasdaq Composite entered a bear market. The Dow, Nasdaq and S&P 500 all saw their biggest weekly percentage drops since March 2020, a period when markets were reeling during the Covid-19 crisis.
The S&P 500, a widely followed measure of U.S. large-cap stocks, plummeted 6% on Friday after the Chinese government retaliated against Trump’s reciprocal tariffs.
The question is, “what makes it stop?” said Jeffrey Kleintop, chief global investment strategist at Charles Schwab, in a phone interview. There are “no winners in a trade war,” said Kleintop. “I think there are some negotiations going on,” he said, but “that may take some time.”
A gauge of investor anxiety in the U.S. stock market has soared since President Trump announced reciprocal tariffs on April 2. The Cboe Volatility Index
surged 50.9% on Friday to 45.31, its biggest climb of the year and building on its spike seen April 3.
Way past that.
