The U.S. stocks continued to sink on Friday and capped off the week with the worst performance since 2020. Blue chip Dow Jones Industrial Average crashed more than 2,200 points to close in the correction territory while tech-heavy Nasdaq Composite entered the bear market.
The sell-off intensified on Wednesday after President Donald Trump introduced sweeping tariffs against major U.S. trade partners. It was further fueled on Friday after China responded with the introduction of 34% tariffs on all imports from the U.S.
The Dow Jones plunged by 5.50% or 2,231.07 points to close at 38,314.86. This was the first time ever that the index lost 1,500 points in back-to-back trading sessions. It is 7.41% down for the week and more than 14% down since its record high in December.
Nasdaq, on the other hand, lost 962.82 or 5.82% to end Friday’s session at 15,587.79. It slipped 8.55% for the week and has now lost roughly 23% from December’s all-time high. This puts it in the bear market territory, according to Wall Street’s definition.
The benchmark S&P 500 closed at 5,074.08 after a 322.44 or 5.97% dip. It is 8.21% down for the week and 17% down from February’s record.
Experts believe that the stock market is close to bottoming out but that the long-term consequences will be significant.
“While the market may be close to the bottom in the short-term, we are concerned about the impact of a global trade war on long-term economic growth,” Emily Bowersock Hill, the CEO of Bowersock Capital Partners, told CNBC in an interview.