Markets Plunge as Trade War Escalates on Wall Street Friday Bloodbath

 WallSt.Watchdog
 
  WallSt.Watchdog
 
Follow  Message
 
 
 
More than just a barking dog. We dig deep, sniff out scams, and expose market manipulations. Join us to become a savvier investor, armed with truth and insight. Remember, Wall Street might sleep, but the Watchdog never does.
 

•  04 Apr 2025
 

Global markets experienced a severe selloff on Friday as trade tensions between the United States and China dramatically escalated. The Dow Jones Industrial Average plummeted over 1,600 points, while the S&P 500 and Nasdaq suffered even steeper percentage losses, with the Nasdaq officially entering bear market territory.

The catalyst for today's market meltdown was China's announcement of retaliatory tariffs, imposing a substantial 34% levy on all U.S. products—directly mirroring recent tariff threats from the Trump administration. This tit-for-tat escalation sent shockwaves through financial markets, triggering widespread panic selling across nearly all sectors.

Technology stocks were hit particularly hard, with semiconductor companies experiencing their worst week since the dot-com crash. Investors fled to safe-haven assets, sending bond prices higher as recession concerns mounted. The CBOE Volatility Index (VIX), often called the "fear gauge," surged nearly 40% to reach an 8-month high, closing at 30.02 on Thursday.

Among the few bright spots in today's carnage, Simulations Plus ($SLP) gained after posting better-than-expected quarterly results. The company benefited from strong performance in its software solutions and services portfolio despite industry headwinds. Better Choice Company ($BTTR) also bucked the trend, rising nearly 10% following the announcement of a debt-to-equity conversion agreement with SRx Health Solutions.

On the opposite end, Baker Hughes ($BKR) was among the hardest hit, plunging over 13% and entering oversold territory according to technical indicators. The energy services provider's decline came despite a report showing U.S. oil rig counts jumping to their highest levels since June.

Notable financial stocks also suffered, with Bank of America ($BAC) dropping more than 7% ahead of its upcoming earnings report. Main Street Capital ($MAIN) fell by a similar margin, breaking below its 200-day moving average—a bearish technical signal that could portend further weakness.

Consumer staples held up relatively better, though still declined. The Coca-Cola Company ($KO) pulled back 4% after recently hitting a 52-week high, while Kraft Heinz ($KHC) dropped nearly 3% as analysts warned about potential disappointment in its upcoming earnings report.

Federal Reserve Chair Jerome Powell acknowledged that the new tariffs were "higher than expected" but indicated no rush to cut interest rates, suggesting the central bank wants more economic clarity before making policy adjustments. This stance provided little comfort to investors already concerned about slowing economic growth amid escalating trade conflicts.

The day's massive selloff erased approximately $2.4 trillion in market capitalization from the S&P 500, leaving investors to grapple with the possibility of extended market turmoil as the U.S.-China trade relationship deteriorates further. With only 26 stocks in the S&P 500 posting gains today, the breadth of the decline underscores the comprehensive nature of the market's distress.

As Wall Street closes out one of its worst weeks in recent memory, investors will be closely watching economic data, corporate earnings reports, and—perhaps most importantly—any signals from Washington or Beijing that might indicate whether this trade conflict will continue to intensify or if diplomatic paths toward de-escalation remain open.