The US benchmark indices continued their downward run on Friday, with Wall Street’s fear level at a five-year high amid Donald Trump’s announcement of sweeping new tariffs earlier this week and China retaliating with a 34 per cent levy on all US imports.
Trillions were wiped off stock market values as investors and economists said they were fearful about the risk of recession ahead. US stock markets slumped more than 10 percent in two days till Friday, erasing over $5 trillion in investors’ wealth after Trump unleashed his Tariff war.
A Wall Street Journal front page for Saturday/Sunday captured Trump heading towards the golf course as markets bled through.
The drop marked the worst week for Wall Street since March 2020 for the S&P 500, when the world was unexpectedly hit with the Covid-19 pandemic. The key index lost 6 per cent after China’s move, despite a better-than-expected report on the US job market.
Friday’s 6 per cent drop in S&P 500 brought the index close to the 7 per cent lower circuit threshold that would have triggered a 15-minute trading halt that would pause panic selling to avoid a worse downward stock-market spiral.
The Dow Jones Industrial Average plummeted 2,231 points or 5.5 per cent and Nasdaq Composite decline 5.8 per cent.
The Nasdaq Composite is now in a bear market, as China imposed fresh tariffs on all US goods, sparking worries of an extended global trade war.
“Right now, how bad it gets depends on how committed the administration is to this set of policies which, clearly, the market is voting against,” Steve Sosnick, chief strategist at Interactive Brokers, was quoted as saying by Reuters.
The tariffs prompted “shellshock” among business leaders weighing the potential economic damage, Reuters quoted a senior financial executive as saying.
Trump still hails tariffs
In a post on Truth Social, Donald Trump on Saturday hailed the tariffs imposed by him, arguing that China was hit worse than the US.
“China has been hit much harder than the USA, not even close. They, and many other nations, have treated us unsustainably badly. We have been the dumb and helpless “whipping post,” but not any longer. We are bringing back jobs and businesses like never before. Already, more than FIVE TRILLION DOLLARS OF INVESTMENT, and rising fast! THIS IS AN ECONOMIC REVOLUTION, AND WE WILL WIN. HANG TOUGH, it won’t be easy, but the end result will be historic. We will, MAKE AMERICA GREAT AGAIN,” he said.
The US President had earlier labelled the market crash as an adjustment that would prove beneficial in the long run.
Investors lose $5 trillion, Donald Trump goes golfing
Even as the markets bled, US President Donald Trump headed to play golf at Mar-a-Lago, his private Palm Beach, Florida, club.
Before going out golfing, Trump wrote in a post, “THIS IS A GREAT TIME TO GET RICH”.
Sporting his signature red “Make America Great Again” hat and white polo shirt, Trump was spotted waving at his supporters who were waiting for him down a street lined with palm trees.
The Republican leader was scheduled to attend a dinner for MAGA Inc. on Friday.
He spent Thursday in Miami at a different one of his golf courses, where he attended a Saudi-funded tournament. He landed in Marine One and was picked up in a golf cart driven by his son Eric.
(With inputs from agencies)
