In a dramatic escalation of the global trade war, China announced a sweeping 34 percent retaliatory tariff on all U.S. goods, effective April 10, intensifying pressure on financial markets already reeling from the impact of U.S. President Donald Trump’s reciprocal trade policies. The announcement sent Wall Street futures tumbling as much as 3 percent, while European and Asian markets faced their steepest losses in years, with Indian indices also closing sharply lower on Friday.

Wall Street Futures Signal Deep Sell-Off as Tariff War Escalates

By 4 PM IST, U.S. equity futures had plunged in response to the Chinese government’s announcement, raising alarm over a potential economic downturn. The most aggressive tariffs imposed by China to date, the move is seen as a direct counter to the U.S. decision to raise duties on Chinese imports from 20 percent to an anticipated 54 percent by next week.

S&P 500 futures were down 2.15% at 5,280.60
Dow Jones futures fell 2.22%, or over 900 points, to 39,645.3
Nasdaq 100 futures dropped 2.51% to 18,056.9

Strategists and economists warn that this tit-for-tat escalation could cause long-term damage to global corporate earnings and investor sentiment. “Because of it being extreme, investors are now worried about what the reciprocal tariffs will end up being,” said Sam Stovall, Chief Investment Strategist at CFRA Research.

Highlights:

China’s 34% tariff covers all U.S. goods, effective April 10
Wall Street futures slide up to 2.5% amid fears of economic contagion
Trump’s upcoming 54% tariff hike on Chinese goods expected next week

US Equities in Correction Territory After Thursday’s Brutal Sell-Off

The latest futures slump follows a bloodbath on Thursday when U.S. markets logged their worst single-day losses since 2020.

S&P 500 plunged 4.84% or 274.45 points to 5,396.52
Nasdaq Composite dropped nearly 6% to 16,550.60
Dow Jones fell 3.98%, shedding 1,679.39 points to close at 40,545.93
Russell 2000, tracking small caps, nosedived 6.59%

With both the S&P 500 and Nasdaq now down more than 10% from their recent highs, U.S. equities have officially entered correction territory, a technical warning sign of possible broader market decline.

Highlights:

Major U.S. indices entered correction after a week of heavy selling
Nearly $2.5 trillion in market cap wiped out from U.S. equities this week
Investor sentiment deteriorates rapidly amid tariff shocks

European, Asian Markets Join Sell-Off: Worst Weekly Performance in Years

The shock from the Sino-American tariff standoff quickly rippled through Europe, where indices logged their worst weekly performance in three years. The Stoxx Europe 600 fell over 2%, as major regional markets plunged:

Germany’s DAX down 2.39%
France’s CAC 40 fell 2%
UK’s FTSE 100 declined nearly 3%

The European Union, which is facing a 20% U.S. tariff on its own goods, vowed to retaliate. Meanwhile, South Korea, Mexico, and India have adopted a cautious stance, preferring to wait for the outcomes of potential trade negotiations before finalizing their own tariff responses.

In Asia:

Japan’s Nikkei 225 fell 3%
South Korea’s KOSPI dropped 1%
Markets in Shanghai, Taiwan, Hong Kong, and Indonesia were shut for holidays but are expected to react sharply when they reopen

Highlights:

European stocks face worst week since 2021
EU threatens countermeasures against U.S. tariffs
Asian markets prepare for volatility once holidays conclude

Indian Markets Extend Losses: Over Rs 9 Lakh Crore Market Cap Wiped Out

Back home, Indian equities mirrored global turmoil. The BSE Sensex crashed 930.67 points or 1.22%, closing at 75,364.69, after hitting an intraday low of 75,240.55. The NSE Nifty 50 declined 345.65 points or 1.49% to settle at 22,904.45.

During the session, Nifty lost as much as 1.64%, reaching a day-low of 22,867.90, with widespread selling across IT, metals, and pharma sectors. Investors saw nearly ₹9 lakh crore of market capitalisation evaporate on the Indian bourses over the past two sessions, intensifying anxiety over the global macroeconomic outlook.

Highlights: