The rout in stock markets continued on Friday as worries deepened about a global trade war, after China retaliated against President Trump’s sweeping tariffs with steep levies of its own on U.S. goods.
The S&P 500 was set to open more than 2 percent lower on Friday, according to futures trading. On Thursday, the index posted its worst daily loss since 2020, plunging 4.8 percent.
European and Asian indexes also fell sharply for a second day as investors weighed the economic effects of Mr. Trump’s tariffs. The Stoxx Europe 600 dropped more than 4 percent, erasing its gains for the year. In Japan, the Nikkei 225 fell 2.8 percent, matching a drop the day before.
The Chinese government said on Friday that it would match Mr. Trump’s plan for 34 percent tariffs on goods from China with its own 34 percent tariff on imports from the United States. It also added 11 American companies to its list of “unreliable entities,” essentially barring them from doing business in China or with Chinese companies.
The moves showed that Beijing has no intention of backing down in the trade war with Mr. Trump. Investors were already on edge because of the potential disruption that Mr. Trump’s policies, including widespread deportations and layoffs of federal workers, could have on the economy.
His announcement on Wednesday, which he called “Liberation Day,” included a minimum tariff of 10 percent on nearly all imports, causing markets to convulse as investors dumped stocks and sought safety in government bonds.
On Friday, the yield on 10-year Treasury bonds fell steeply by 0.16 percentage points to 3.88 percent, the lowest since early October.
The severity of the stock market sell-off reflects how investors were taken by surprise by the scale of the tariffs. At the same time, Mr. Trump has said he is open to negotiating with countries, making it unclear how long tariffs will persist and making it harder to judge how companies might respond.
“Liberation day will not bring freedom from uncertainty,” analysts at Goldman Sachs said in a note.
In Europe, bank stocks were hard hit, reflecting fears of tariffs hitting growth in a region already struggling because of weak exports and business investment. Bank of America said in a report on Friday that its latest economic forecast implied that the benchmark pan-European stock index could fall another 10 percent in the coming months. The “narrative has started to darken,” the bank’s analysts wrote.
Steep levies were imposed on many Southeast Asian countries — including Vietnam, Indonesia, Cambodia — that are critical to the supply chains of some of America’s biggest brands. These countries also reprocess a lot of Chinese components for export to the United States, a popular way for companies to avoid longstanding U.S. tariffs on goods coming straight from China.
The stock market in Vietnam, which faces a 46 percent tariff, was down again on Friday after plunging the prior day.
In South Korea, the Kospi Index fell 0.9 percent on Friday after dipping about the same amount the prior day. Mr. Trump put a 26 percent tariff on imports from South Korea.
Stock markets in mainland China, Hong Kong and Taiwan were closed on Friday for a local holiday.
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