Dow Opens Sharply Lower, Bonds Rally After China Retaliates Against Trump Tariffs

China lashed back at President Trump’s tariffs, applying 34% levies on all imported goods from the U.S. Beijing said the levies would come into effect next Thursday, the day after a big part of Trump’s promised tariffs go live.

The market selloff continued Friday, with the China retaliation and recession fears pushing investors to sell stocks and hide in the safety of government bonds.

Markets took little comfort from President Trump’s willingness to negotiate over the tariffs. The levies announced late Wednesday were deeper and more aggressive than the business world expected. And even as Trump left the door open to making deals, he vowed new tariffs on drugs and microchips.

Marco Rubio, Trump’s secretary of state, acknowledged that “markets are crashing” but said economies weren’t, and that global businesses would adjust to the new environment.

Investors, however, drew some solace from an unexpectedly strong jobs report. That showed the economy added 228,000 jobs last month, giving little sign that uncertainty ahead of Trump’s tariff rollout had derailed the labor market.

Major U.S. indexes all dropped more than 2% in morning trading. The Nasdaq Composite was on pace to close in a bear market, meaning it has fallen more than 20% from a recent peak. Overseas markets took fresh hits, with European stocks tumbling nearly 4%.

Traders have ramped up bets on interest-rate cuts this year, figuring the Federal Reserve will have to shore up the economy. JPMorgan economists see a 60% chance of a global recession. Oil prices slid further, with benchmark U.S. crude falling to about $62 a barrel, the lowest level since 2021 if they settle there.

Investors rushed into Treasurys, pushing 10-year yields well below 4%. Bonds in other big economies, like Japan, Germany and the U.K., also rallied. Bond yields fall as prices rise. The dollar, which fell sharply Thursday, rebounded somewhat but remains near its weakest levels of the year.