Wall Street futures drop up to 4% as China announces 34% tariffs on all US goods

US stock markets see another red day after touching historic lows on Thursday.

Wall Street futures plunged sharply on Friday after China announced a sweeping 34 percent retaliatory tariff on all US goods, , effective April 10. The latest step by China has raised fears of an escalating global trade war and a looming recession.

The move comes as a retaliatory step to US President Donald Trump’s decision to raise import duties on Chinese goods to 20 percent since returning to the White House in January. The US tariffs are scheduled to climb to 54 percent next week.

At around 5 PM India time, futures linked to major US indices were trading deep in the red. S&P 500 futures dropped 3.47 percent to 5,209.10, while Dow Jones Industrial Average futures sank 3.42 percent or 1,400 points to 39,157.8.

The tech-heavy Nasdaq 100 futures fell even harder, down 3.81 percent at 17,815.3, signalling a weak opening for US markets at 7 PM India time.

"The tariff announcement ended up being more extreme than most investors had anticipated," Sam Stovall, chief investment strategist at CFRA Research, told Reuters. "Because of it being extreme, investors are now worried about what the reciprocal tariffs will end up being. The longer these tariffs remain, the weaker our economic and corporate profit growth is likely to be."

On Thursday, the S&P 500 ended the session down 274.45 points or 4.84 percent at 5,396.52. The Nasdaq Composite shed 1,050.44 points or 5.97 percent to close at 16,550.60, while the Dow Jones Industrial Average lost 1,679.39 points or 3.98 percent, settling at 40,545.93.

The small-cap Russell 2000 index also suffered, tumbling 6.59 percent to 1,910.55.

The European Union, which faces a 20 per cent levy on its goods, vowed to retaliate. South Korea, Mexico, India and other key US trading partners have said they will wait and watch, hoping for negotiations before the new tariffs come into force on April 9, reported Reuters.

Since Trump took office earlier this year, US equities have seen significant erosion in value. The S&P 500 and Nasdaq have both fallen 10 percent from their recent highs, confirming a correction amid concerns.

The negative sentiment also spilled over into global markets. European indices were sharply lower, heading for their worst weekly performance in three years. The Stoxx Europe 600 Index declined over 2 percent, with Germany’s DAX slipping 2.39 percent, France’s CAC 40 falling 2 percent, and the UK’s FTSE 100 losing nearly 3 percent.

Asian markets were also under pressure. Japan’s Nikkei fell nearly 3 percent, while South Korea’s KOSPI dropped around 1 percent. Markets in Shanghai, Taiwan, Hong Kong and Indonesia were closed for holidays.

Back home, BSE Sensex tumbled 930.67 points or 1.22 per cent to settle at 75,364.69. During the day, it plummeted 1,054.81 points or 1.38 per cent to hit an intraday low of 75,240.55. The broader NSE Nifty declined 345.65 points or 1.49 per cent to close at 22,904.45. In the session, the 50-share benchmark gauge 382.2 points or 1.64 per cent to 22,867.90.

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