Wall Street opens sharply lower, Nasdaq heading towards bear market

US stocks opened sharply lower on Friday, with the Nasdaq Composite heading into a bear market, after China imposed fresh tariffs on all US goods in response to the Trump administration's sweeping levies, escalating a global trade war.
 
The tech-heavy Nasdaq dropped more than 20% from its all-time closing high touched in December, putting it on course to confirm a bear market.

The S&P 500 lost 134.05 points, or 2.48%, to 5,262.47 points, while the Nasdaq Composite lost 473.16 points, or 2.86%, to 16,077.44. The Dow Jones Industrial Average fell 994.46 points, or 2.45%, to 39,551.47.
 
Earlier today, China declared its intention to levy an additional 34% tariff on all imports from the United States in response to the reciprocal tariff announcement made by US President Donald Trump.

The S&P 500 experienced a 4.8% drop on Thursday, marking its most significant decline since the early stages of the pandemic in 2020, according to the Associated Press (AP). The Dow Jones Industrial Average also saw a decrease, falling by 1,679 points or 4%. Additionally, the Nasdaq composite dropped by 6%. 

The market downturn was not limited to the US, as European and Asian stocks also witnessed declines. Major indexes in Europe, such as France's CAC 40 and Germany’s DAX, fell by 3.3% and reported drops, respectively. Furthermore, Japan’s Nikkei 225 decreased by 2.8%, while Hong Kong’s Hang Seng and South Korea’s Kospi slipped by 1.5% and 0.8%, respectively, according to AP.

The panic was sparked by Trump's announcement of new tariffs, including a minimum 10% on imports and higher rates for certain nations such as China and the European Union, as reported by AP. While some tariff action was anticipated by the market, Trump's decision caught global markets off guard with what Mary Ann Bartels, chief investment officer at Sanctuary Wealth, described as "the worst case scenario for tariffs."

According to UBS, the proposed tariffs could reach levels not seen in nearly a century and have the potential to reduce United States economic growth by 2 percentage points this year, pushing inflation up to around 5%, as reported by AP.