Markets Meltdown: Global Turmoil as China Retaliates Against US Tariffs

Global stock markets and oil prices plummeted as China countered US tariffs, heightening trade war fears. Investors fled to bonds, expecting central bank rate cuts. Major indices like the Nasdaq and S&P 500 saw significant declines, exacerbated by increased tariffs and weaker economic forecasts.

Global stock markets and oil prices experienced a significant downturn on Friday as China retaliated against US President Donald Trump's tariffs, stoking fears of a prolonged global trade war. The Nasdaq Composite was nearing bear market territory, and the pan-European STOXX 600 index confirmed it was in a correction, fueling global recession concerns.

In the aftermath of Trump's tariff announcement on Wednesday, S&P 500 companies suffered a record loss exceeding $4 trillion, according to LSEG data compiled by Reuters. Investors sought refuge in government bonds, while traders increased bets on rate cuts from the Federal Reserve and other central banks. China's additional 34% levies on American goods confirmed the onset of a global trade war.

The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all saw significant declines, as did the pan-European STOXX index, marking its largest daily loss since the COVID-19 selloff of 2020. Oil prices fell sharply, while the US dollar gained strength following robust payroll data, prompting a shift in investor strategy towards cash and waiting out the uncertainty.

(With inputs from agencies.)