The Dow Jones Industrial Average fell 572.73 points, or 2.34 percent, to 23,932.49, the S&P 500 lost 58.4 points, or 2.19 percent, to 2,604.44 and the Nasdaq Composite dropped 161.44 points, or 2.28 percent, to 6,915.11. In the absence of new all-time highs, stock fans on bear watch should be waiting for the 21,293.37 level in the Dow and 2,298.30 in the S&P. Beijing fired back hours later by threatening tariffs on $50 billion worth of USA goods, including cars, planes, and soybeans. Still, Pride said all of the proposed tariffs add up to a pretty small fraction of trade between the US and China, and overall, they wouldn't affect the nation's economy that much if they do go into effect. But Wall Street began to reassess that view as the administration sent conflicting signals throughout the day. China responded by indicating it wouldn't back down, saying it would fight back "at any cost", according to a statement from the Commerce Ministry. "So the ability of the equity markets to push significantly lower is going to be limited", said John Brady, senior vice president at R.J.
Analysts said the market also responded to Federal Reserve Chair Jerome Powell, who said that the USA economy was growing and a turbulent stock market would not change the Fed's course to gradually raise interest rates. But the drop resumed shortly thereafter as traders searched for clarity on trade with tensions quickly escalating between the US and China.
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To make things worse, the United States economy added fewer jobs than expected in March, according to a government report released Friday morning.
"Our view remains that a negotiated solution is most likely, and so the tariffs ultimately won't be implemented or will be much milder if they are", said Shane Oliver, head of investment strategy at AMP Capital in Sydney. "There are concerns about tariffs, trade wars and the potential for higher inflation-and the [Federal Reserve's] response to that".
The U.S. Treasury puts the closing yield on the 10-year note at 2.77%.