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By Caroline Valetkevitch
NEW YORK (Reuters) -Global stock markets and oil prices tumbled again on Friday as China struck back against U.S. President Donald Trump's tariffs and worries mounted about a prolonged global trade war.
The Nasdaq Composite was headed toward a bear market, while the pan-European STOXX 600 index confirmed it was in a correction as the trade war fanned global recession concerns.
Since Trump unveiled his tariffs late on Wednesday, S&P 500 companies have lost over $4 trillion in stock market value, a record two-day decline for the benchmark, exceeding a two-day loss of $3.3 trillion in March 2020, when the pandemic ripped across global markets, according to LSEG data compiled by Reuters.
Some investors fled to the safety of government bonds, while traders ramped up bets on rate cuts from the Federal Reserve and other major central banks.
Responding to Trump's tariffs, China on Friday said it would impose additional levies of 34% on American goods, confirming investor fears that a full-blown global trade war is under way.
Trump slapped a 10% tariff on most U.S. imports and much higher levies on dozens of countries, erecting the steepest trade barriers in more than 100 years.
"It's sort of the worst fears of where the tariff program was headed," said Rick Meckler, partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey.
"For those investors who were sure it was just a negotiation - while that still may be true at some point - it's getting awfully deeper into the detail and more dangerous for companies."
Data showing the U.S. economy added far more jobs than expected in March did little to brighten the mood.
Federal Reserve Chair Jerome Powell said in remarks at a business journalists conference in Arlington, Virginia, that Trump's new tariffs are "larger than expected" and the economic fallout, including higher inflation and slower growth, likely will be as well.
He also said the U.S. central bank does not have a prediction of a downturn in its outlook but he recognized private-sector forecasters are shifting on that front.
"I think (Powell's) comments will be disappointing for those who believe that the Fed is going to step in anytime soon," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
Companies with exposure to China also fell. Apple, Nvidia and Amazon.com were all down sharply.
Bank shares dropped across the globe as fears of a recession increased. The S&P 500 financial index was down 6%.