Trade Tensions Trigger Market Turmoil as China Strikes Back

U.S. stock futures dropped sharply as China announced new tariffs in retaliation to U.S. trade policies, prompting concerns of a bear market and economic downturn. Major indexes like S&P 500 and Nasdaq saw significant declines, while investors braced for potential interest rate cuts to cope with market pressures.

Stock markets plummeted on Friday as China unveiled retaliatory tariffs against the United States, escalating trade tensions and causing widespread concern on Wall Street. The move follows sweeping U.S. levies and has already contributed to a $2.4 trillion plunge in U.S. equities.

The S&P 500 has suffered its largest single-day loss since June 2020, dropping 4.8% after President Trump announced a 10% tariff on most imports into the U.S. Further declines are anticipated, with analysts predicting the index could dip below the 5,000 mark if negotiations falter.

Nasdaq also experienced a substantial drop of 6%, reminiscent of the pandemic-induced selloff in March 2020. Financial giants like Bank of America and JPMorgan Chase witnessed stock dips amid expectations of lowering interest rates and slower economic growth. All eyes are on Fed Chair Jerome Powell's upcoming speech for insights into interest rate policy.

(With inputs from agencies.)