Wall Street Today: S&P 500, Nasdaq trade lower on escalating trade war with China; Dow Jones tanks by 120 points

Wall Street Today: Wall Street's main indexes were muted in choppy trading after China increased its tariffs on US imports to 125 per cent, escalating a trade war that has hit global markets, while results from major banks set the earnings season rolling.

Stocks fell briefly on Friday after official data showed US consumer sentiment deteriorated sharply in April and 12-month inflation expectations surged to the highest level since 1981 amid unease over escalating trade tensions.

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China retaliated after US President Donald Trump on Thursday doubled down on the country by increasing tariffs to an effective rate of 145 per cent, even as he announced a 90-day tariff reprieve on most trading partners worldwide.

US stocks today

Wall Street's indices have been on a roller-coaster ride in response to tariff announcements over the past few days. Wall Street fell for four straight sessions, before bouncing back on Wednesday with the S&P 500 seeing its largest one-day percentage jump since October 2008. US stocks, however, slumped again on Thursday and were about seven per cent off from levels seen before last week, when Trump's "reciprocal" tariffs sparked the market rout.

JPMorgan Chase gained 2.5 per cent after beating first-quarter profit estimates, while Morgan Stanley fell about one per cent after reporting quarterly results. Wells Fargo lost 3.7 per cent after the lender lowered its full-year net interest income expectations.

Despite beating first-quarter profit estimates, executives at the banks warned that sweeping tariffs could fuel risks and weigh on economic growth. Treasurys have long been seen as one of the safest possible investments in the world.

The drop in prices for Treasurys in turn sent their yields higher, because investors are essentially demanding to get paid more for the risk of holding them. The yield on the 10-year Treasury jumped as high as 4.58 per cent earlier in the day, but has moderated to 4.47 per cent. It stood at 4.4 per cent late Thursday and just 4.01 per cent at the end of last week. 

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Megacap and growth stocks were mixed, with Meta Platforms down 1.6 per cent and Apple gaining 2.2 per cent. The S&P 500 was up 1.4 per cent in afternoon trading, but only after veering repeatedly between earlier gains and losses. The Dow Jones Industrial Average was up 456 points, or 1.2 per cent and the Nasdaq composite was 1.6 per cent higher. Both also swung earlier, with the Dow going from a loss of nearly 340 points to a gain of nearly 500 points. 

The CBOE Volatility index, seen as Wall Street's fear gauge, was last at 43.59 points - hovering near its highest level since August. Still, all three major Wall Street indexes are set for robust weekly gains, with the Nasdaq and the S&P 500 on track for their best weekly showing since November 2024. 

Investors sought refuge in traditional safe-haven assets such as gold, with the rally in the precious metal lifting gold miners. US monthly producer prices unexpectedly fell in March, coming on the heels of a consumer prices reading which also showed an unexpected decline last month. 

In stock markets abroad, indexes were scattershot around the world. Germany’s DAX lost 0.9 per cent, but the FTSE 100 in London added 0.6 per cent as the government reported the economy, the world’s sixth largest, saw a growth spurt in February. Japan’s Nikkei 225 dropped three per cent, while Hong Kong’s Hang Seng climbed 1.1 per cent.

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Wall Street opening bell

Before hitting the noon hour, the Dow Jones Industrial Average last fell 32.12 points, or 0.08 per cent, to 39,561.54, the S&P 500 lost 0.24 points to 5,267.81, and the Nasdaq Composite gained 37.75 points, or 0.23 per cent, to 16,425.06.

The S&P 500 was up 0.4 per cent in morning trading after swinging between small gains and losses. The Dow Jones Industrial Average was up 123 points, or 0.3 per cent, as of 10:10 a.m. Eastern time, and the Nasdaq composite was 0.6 per cent higher.

Shortly after opening bell, the Dow Jones Industrial Average index dropped 306 points, and the tech-heavy Nasdaq composite index sank 0.4 per cent. The drops erased more of the huge gains stocks made on Wednesday after Trump paused tariffs on most countries outside of China.

Wall Street's main indexes opened lower on Friday as markets assessed the latest escalation in the trade war, with China increasing its tariffs on US imports to 125 per cent. After opening, the Dow Jones Industrial Average fell 100.2 points, or 0.25 per cent, at the open to 39493.42. The S&P 500 fell 12.5 points, or 0.24 per cent, at the open to 5255.56​, while the Nasdaq Composite dropped 28.8 points, or 0.18 per cent, to 16358.532 at the opening bell.