The stock market took a sharp downturn on Friday as fears of inflation and tariffs intensified. The Dow Jones Industrial Average closed down 715.80 points, or 1.69%, at 41,583.90.
#MarketAlert | US markets plunge for 2nd straight day as China hits back with tariffs, S&P 500 loses $5T in 2 days amid Trump trade war fears. #TrumpTariffs #RecessionFears #StockMarketCrash #GlobalMarkets pic.twitter.com/jNZ0pYAusS
— ET NOW (@ETNOWlive) April 5, 2025
The S&P 500 shed 1.97% to 5,580.94, ending the week down for the fifth time in the past six weeks.
The Nasdaq Composite plunged 2.7% to settle at 17,322.99. Shares of several technology giants dropped, putting pressure on the broader market. Google-parent Alphabet lost 4.9%, while Microsoft and Amazon each shed 4.3%.
Dow Jones, Stock Markets CRASH: Recession is almost here? Trump tariffs tank Dow, NASDAQ, S&P – $5 trillion dustedhttps://t.co/kDFbqOKJM7
— ET NOW (@ETNOWlive) April 5, 2025
This week, the S&P 500 lost 1.53%, while the Dow lost 0.96%. The Nasdaq declined 2.59%.
The S&P 500 was down another 5.97% today
It lost 10.5% over the last two days, the worst two-day decline since March 12, 2020 pic.twitter.com/5TfQyhK336
— Nick Timiraos (@NickTimiraos) April 4, 2025
With this latest losing week, Nasdaq is now on pace for a more than 8% monthly decline, which would be its worst monthly performance since December 2022.
S&P 500 -10.5% in just the past two days and approaching bear market territory (NASDAQ, NASDAQ 100, and Russell 2000 already there)
[Past performance is no guarantee of future results] pic.twitter.com/yJyWSMemS1
— Liz Ann Sonders (@LizAnnSonders) April 4, 2025
Stocks took a leg lower on Friday after the University of Michigan’s final read on consumer sentiment for March reflected the highest long-term inflation expectations since 1993. Personal consumption expenditures also came out hotter-than-expected, rising 2.8% in February and reflecting a 0.4% increase for the month, stoking concerns about persistent inflation. “The market is getting squeezed by both sides.
There is uncertainty around next week’s reciprocal tariffs hitting the major exporting sectors like tech alongside concerns about a weakening consumer facing higher prices hitting areas like discretionary,” said Scott Helfstein, head of investment strategy at Global X. The latest inflation report comes amid a flurry of tariff announcements from the White House, which have roiled the market in recent weeks.
Dow drops on inflation, tariff fears
Investors are looking ahead to April 2, when President Donald Trump is expected to announce further tariff plans, for further clarity. On Friday, Canadian Prime Minister Justin Trudeau announced that the Canadian government will implement retaliatory tariffs following Wednesday’s announcements. At one point on Friday, Wall Street’s VIX index, which tracks fear and greed, soared nearly 20% from its close on Thursday, touching a lunchtime high of 22.18.
The VIX this month soared as high as 29.57 during a market sell-off on March 11, after ending February at 19.63. The stock market appears to be on more solid footing after weeks of choppy trading, according to Piper Sandler chief market technician Craig Johnson. “We believe the weight of the technical evidence suggests an intermediate-term low may be in place despite the heightened uncertainties surrounding tariffs and inflation,” Johnson said in a note to clients.
U.S. stocks are lagging most foreign markets, data compiled by Oppenheimer’s trading desk shows. The S&P 500 has dropped more than 3% so far this year. Meanwhile, the average country’s exchange-traded fund has gained more than 8%, Oppenheimer found.
CoreWeave opened at $39 per share in its Nasdaq debut on Friday, marking the biggest U.S. tech IPO since 2021. The artificial intelligence tech seller raised $1.5 billion in its initial public offering. Cryptocurrencies tumbled alongside equities to finish out the week.
The price of Bitcoin was last lower by more than 3% at $83,850.80, according to Coin Metrics, putting the flagship cryptocurrency on pace for its first three-week slide of 2025. Ethereum dropped 6% to $1,875.16, tracking for a 5% weekly decline and a loss of 15% for the month.
