Stock market poised for another sell-off on Trump tariffs, China retaliation

After having their worst day in five years Thursday, U.S. stock markets were poised to sink again Friday, as President Trump's tariff plan and Chinese retaliation weighed on investors.Why it matters: As opposed to Trump's first term, when sharply negative market moves often influenced him to pull back policy, the second Trump administration is taking a far less flexible stance. By the numbers: The S&P 500 and the Nasdaq were both indicated about 3% lower in pre-market trading. That followed a sharp sell-off in Europe, with the pan-continental Stoxx 600 down 4.6%.Driving the news: China announced a major escalation of the trade war Friday morning, levying a 34% tariff on imports from the U.S. that will take effect on April 10.Market losses accelerated sharply on the news. Context: Thursday's decline was the worst since the COVID panic of March 2020.The Russell 2000, considered the benchmark for small-cap stocks, is now in a "bear market," off 20% from its most recent highs. The intrigue: The sell-off is prompting a flight to safety, with U.S. bonds and gold both rising sharply Friday morning. Go deeper: Why the dollar is doing what it's not supposed to do

After having their worst day in five years Thursday, U.S. stock markets were poised to sink again Friday, as President Trump's tariff plan and Chinese retaliation weighed on investors.

Why it matters: As opposed to Trump's first term, when sharply negative market moves often influenced him to pull back policy, the second Trump administration is taking a far less flexible stance. By the numbers: The S&P 500 and the Nasdaq were both indicated about 3% lower in pre-market trading. That followed a sharp sell-off in Europe, with the pan-continental Stoxx 600 down 4.

6%.Driving the news: China announced a major escalation of the trade war Friday morning, levying a 34% tariff on imports from the U.S.

that will take effect on April 10.Market losses accelerated sharply on the news. Context: Thursday's decline was the worst since the COVID panic of March 2020.

The Russell 2000, considered the benchmark for small-cap stocks, is now in a "bear market," off 20% from its most recent highs. The intrigue: The sell-off is prompting a flight to safety, with U.S.

bonds and gold both rising sharply Friday morning. Go deeper: Why the dollar is doing what it's not supposed to do.