In a week marked by financial turbulence, U.S. President Donald Trump’s aggressive tariff policies triggered a chain reaction that sent shockwaves across global financial markets. The immediate fallout came on Friday, when Wall Street experienced its sharpest decline since the COVID-19 market crash in March 2020. The S&P 500 plummeted 6%, while the Dow Jones fell by 2,231 points, closing at 38,314.86 — a 5.5% drop. Meanwhile, the tech-heavy Nasdaq dipped nearly 6%, officially entering a bear market with a 20% decline since December.
The sharp decline was fueled by China’s retaliatory move to impose 34% tariffs on all American imports, effective April 10. This tit-for-tat escalation spurred a record-shattering 26.79 billion shares in trade volume on U.S. exchanges — surpassing the previous record set in January 2021.
Global markets didn’t escape the tremors. Investors worldwide grew increasingly concerned that the ongoing U.S.-China trade war could ignite inflation and push the global economy toward recession. Tech giants bore the brunt of the sell-off, with Chinese stocks like Alibaba, Baidu, and JD.com losing over 7.7%, and U.S. powerhouses such as Apple dipping by 7.3%.
Despite the chaos, Trump showed no signs of retreat. Calling the dip “a golden opportunity” for investment, he departed for a golf round at Mar-a-Lago, asserting that “this is the best time to get rich.” He downplayed the pain Americans might feel from rising costs, framing it as a necessary sacrifice to revive local manufacturing and strengthen national interests.
In the background, the Federal Reserve faces a difficult balancing act. Though rate cuts could help revive market confidence, inflation fears leave little room for maneuver. Fed Chair Jerome Powell emphasized the importance of keeping inflation expectations in check to prevent short-term shocks from becoming long-term problems.
The future hinges on how quickly both sides de-escalate. Economists believe that if negotiations progress swiftly, markets could recover just as fast. However, as long as tariff uncertainty looms, volatility will remain the new normal.