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Wall Streets worst crisis since COVID slammed into a higher gear Friday. The S&P 500 lost 6% after China matched President Donald Trumps big raise in tariffs announced earlier this week. The move increased the stakes in a trade war that could end with a recession that hurts everyone. Not even a better-than-expected report on the U.S. job market, which is usually the economic highlight of each month, was enough to stop the slide. The drop closed the worst week for the S&P 500 since March 2020, when the pandemic ripped through the global economy. The Dow Jones Industrial Average plunged 2,231 points, or 5.5% Friday, and the Nasdaq composite tumbled 5.8% to pull more than 20% below its record set in December. So far, there have been few, if any, winners in financial markets from the trade war. Stocks for all but 14 of the 500 companies within the S&P 500 index fell Friday. The price of crude oil tumbled to its lowest level since 2021. Other basic building blocks for economic growth, such as copper, also saw prices slide on worries the trade war will weaken the global economy. Chinas response to U.S. tariffs caused an immediate acceleration of losses in markets worldwide. The Commerce Ministry in Beijing said it would respond to the 34% tariffs imposed by the U.S. on imports from China with its own 34% tariff on imports of all U.S. products beginning April 10. The United States and China are the worlds two largest economies. Markets briefly recovered some of their losses after the release of Friday mornings U.S. jobs report, which said employers accelerated their hiring by more last month than economists expected. Its the latest signal that the U.S. job market has remained relatively solid through the start of 2025, and its been a linchpin keeping the U.S. economy out of a recession. But that jobs data was backward looking, and the fear hitting financial markets is about whats to come. The world has changed, and the economic conditions have changed, said Rick Rieder, chief investment officer of global fixed income at BlackRock. The central question looking ahead is: Will the trade war cause a global recession? If it does, stock prices may need to come down even more than they have already. The S&P 500 is down 17.4% from its record set in February. Trump seemed unfazed. From Mar-a-Lago, his private club in Florida, he headed to his golf course a few miles away after writing on social media that THIS IS A GREAT TIME TO GET RICH. The Federal Reserve could cushion the blow of tariffs on the economy by cutting interest rates, which can encourage companies and households to borrow and spend. But the Fed may have less freedom to move than it would like. Fed Chair Jerome Powell said Friday that tariffs could drive up expectations for inflation. That could prove more damaging than high inflation itself, because it can drive a vicious cycle of behavior that only worsens inflation. U.S. households have already said theyre bracing for sharp increases to their bills. Our obligation is to keep longer-term inflation expectations well anchored and to make certain that a one-time increase in the price level does not become an ongoing inflation problem, Powell said. That could indicate a hesitance to cut rates because lower rates can give inflation more fuel. Much will depend on how long Trumps tariffs stick and what kind of retaliations other countries deliver. Some of Wall Street is holding onto hope that Trump will lower the tariffs after prying wins from other countries following negotiations. Trump has given mixed signals on that. On Friday, he said Vietnam wants to cut their Tariffs down to ZERO if they are able to make an agreement with the U.S. Trump also criticized Chinas retaliation, saying on his Truth Social platform that CHINA PLAYED IT WRONG, THEY PANICKED – THE ONE THING THEY CANNOT AFFORD TO DO! Trump has said Americans may feel some pain because of tariffs, but he has also said the long-term goals, including getting more manufacturing jobs back to the United States, are worth it. On Thursday, he likened the situation to a medical operation, where the U.S. economy is the patient. For investors looking at their portfolios, it could have felt like an operation performed without anesthesia, said Brian Jacobsen, chief economist at Annex Wealth Management. But Jacobsen also said the next surprise for investors could be how quickly tariffs get negotiated down. The speed of recovery will depend on how, and how quickly, officials negotiate, he said. On Wall Street, stocks of companies that do lots of business in China fell to some of the sharpest losses. DuPont dropped 12.7% after China said its regulators are launching an anti-trust investigation into DuPont China group, a subsidiary of the chemical giant. Its one of several measures targeting American companies and in retaliation for the U.S. tariffs. GE Healthcare got 12% of its revenue last year from the China region, and it fell 16%. All told, the S&P 500 fell 322.44 points to 5,074.08. The Dow Jones Industrial Average dropped 2,231.07 to 38,314.86, and the Nasdaq composite fell 962.82 to 15,587.79. In stock markets abroad, Germanys DAX lost 5%, Frances CAC 40 dropped 4.3% and Japans Nikkei 225 fell 2.8%. In the bond market, Treasury yields fell, but they pared their drops following Powells cautious statements about inflation. The yield on the 10-year Treasury fell to 4.01% from 4.06% late Thursday and from roughly 4.80% early this year. It had gone below 3.90% in the morning. Stan Choe, Associated Press business writer AP Writers Jiang Junzhe, Huizhong Wu, and Matt Ott contributed.
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E-Commerce
Over the past few years, the job market has remained relatively strong despite rising inflation and other economic headwinds. Even amid ongoing cuts to the federal workforce, the jobs report released today offered a more optimistic outlook than many economists had anticipated: In March, employers added about 228,000 jobs, far exceeding the monthly average of 158,000 jobs over the last year. The number of hours worked each week also remained steady last month, as did hourly wage growth. President Trump was quick to take credit for the job growth captured by the report. But the celebratory mood has been dampened as the administration’s long-awaited (and unprecedentedly high) global tariffs take effectand financial markets are already feeling the impact. Many experts have already noted that the latest jobs numbers may have little bearing on how the market will actually fare in the coming monthsand what the effect could be on employers and workers. As one economist told the New York Times: What we are really seeing is the calm before the storm.” The impact of tariffs already The fallout from Trumps tariffs is already well underway. Global markets have taken a significant hit, dropping to levels that havent been seen since the height of the pandemic in 2020. Economists have warned that the tariffs are more extreme than those imposed by the famed 1930 Smoot-Hawley Tariff Act, which is believed to have exacerbated the Great Depression. “Today was the worst stock market experience in five years,” renowned economist and former treasury secretary Lawrence Summers wrote on Thursday, as part of a series of posts on X. “Usually when you have a terrible stock market experience, it’s because a bank fails, a pandemic, a hurricane, or because some other country does something. We don’t have these kinds of stock market responses in response to policies that the president of the United States is proud of. That is something that is entirely without precedent. It is extremely dangerous.” How higher prices might affect hiring While tariffs are usually intended to be a source of revenue for the federal government, research shows that the effects are typically shouldered by consumers and businesses. As the tariffs lead to higher prices for both parties, experts say companies will likely pull back on hiring and eventually resort to layoffs to cut costs. The Trump administration has argued that while tariffs may drive up prices, they will also help fuel job creation stateside, particularly across manufacturing. While that could be true to some extent, those gains could be outweighed by other job lossesor the increased use of automation to mitigate costs for companies. When analyzing the impact of tariffs levied during Trump’s first term, some economists found that manufacturing employment remained more or less unchanged; in other industries like agriculture, however, tariffs catalyzed job losses. Others have argued that manufacturing employment actually dropped overall, despite modest gains in job creation across the steel industry. How business leaders are preparing Still, economists of all stripes seem concerned about the potential repercussions of the sweeping new tariffs introduced by the Trump administration. There’s already evidence that companies are being more cautious: In March, a survey of chief financial officers found that one in four companies were cutting back on hiring and making changes to their capital spending plans for 2025, in anticipation of Trump’s tariffs. Nearly a third of the 400 companies who were surveyed had cited trade policy and tariffsas well as the uncertainty around themas a source of anxiety. The tariffs were also the number-one business concern among chief financial officers in the first quarter of 2025. Even industries that are not directly impacted by the tariffs could take a financial hit if consumers are spending less overall, which in turn could trickle down to workers. The uncertainty associated with tariffs could lead more companies to pause hiring. While the labor market has largely been stable, it has still cooled over the past few yearsmaking it less resilient to unpredictable forces like the tariffs. Employers have, for the most part, wrested control from workers in the aftermath of the pandemic, especially as they have imposed strict return to work mandates and tightened their budgets. Layoffs might have plateaued to some extent, but companies have also not been adding as many jobs. Many workers have reported finding it more difficult to land a new job. In January, data from the Labor Department indicated that it was taking longer for people who were unemployed or laid off to find new work. As Trump’s tariffs continue to send shock waves across the business world, workers likely need to brace themselves for yet another period of upheaval in the job market.
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E-Commerce
After Trump administration job cuts, nearly half of National Weather Service forecast offices have 20% vacancy rates twice that of just a decade ago as severe weather chugs across the nation’s heartland, according to data obtained by The Associated Press. Detailed vacancy data for all 122 weather field offices show eight offices are missing more than 35% of their staff including those in Arkansas and Kentucky where tornadoes and torrential rain hit this week according to statistics crowd-sourced by more than a dozen National Weather Service employees. Experts said vacancy rates of 20% or higher amount to critical understaffing, and 55 of the 122 sites reach that level. The weather offices issue routine daily forecasts, but also urgent up-to-the-minute warnings during dangerous storm outbreaks such as the tornadoes that killed seven people this week and catastrophic flooding that’s continuing through the weekend. The weather service this week has logged at least 75 tornado and 1,277 severe weather preliminary reports. Because of staffing shortages and continued severe weather, meteorologists at the Louisville office were unable to survey tornado damage Thursday, which is traditionally done immediately to help improve future forecasts and warnings, the local weather office told local media in Kentucky. Meteorologists there had to chose between gathering information that will help in the future and warning about immediate danger. It’s a crisis situation, said Brad Coleman, a past president of the American Meteorological Society who used to be the meteorologist in charge of the weather service’s Seattle office and is now a private meteorologist. I am deeply concerned that we will inevitably lose lives as a result of the added risk due to this short-staffing. Former National Weather Service chief Louis Uccellini said if the numbers are right, it’s trouble. No one can predict when any office gets stretched so thin that it will break, but these numbers would indicate that several of them are there or getting close, especially when you factor that large segments of the country are facing oncoming threats of severe weather, flooding rains while others are facing ominous significant fire risks, Uccellini said in an email. The vacancy numbers were compiled in an informal but comprehensive effort by weather service workers after the cuts spearheaded by Elon Musk’s Department of Government Efficiency. They checked on individual office staffing levels and looked at how they compared to the past. Staffing levels, including vacancies, are detailed and cross-referenced by offices, regions, positions and past trends, with special notes on whether efforts are being made to fill them. The AP, after obtaining the list from a source outside the weather service, sought to verify the numbers by calling individual weather offices, checking online staff lists and interviewing other employees not involved in the data-gathering effort. The workers’ data sometimes varied slightly from data shown on weather service websites, though employees said those could be out of date. Rep. Eric Sorensen, an Illinois Democrat and the only meteorologist in Congress, said his office independently obtained the data and he verified parts of it with weather professionals he knows in Midwestern weather service offices, which are called WFOs. The Davenport-Quad Cities office near his home has a 37.5% vacancy rate. Theyre doing heroic effort. Just with what happened the other day with the tornado outbreak, the killer tornado outbreak, I saw incredible work being done by the WFOs down around Memphis and up to Louisville. Incredible work that saved peoples lives, Sorensen told the AP on Friday. Going forward with these types of cuts, we cant guarantee that people are going to be as safe as they were. I’m incredibly concerned because this affects everyone in every part of the country, Sorensen said, noting the potential for severe storms Friday in House Speaker Mike Johnson’s home district near Shreveport, Louisiana, where the data shows a 13% vacancy rate, well below the average for the south and the rest of the country. The employees’ data, which goes back to 2015, showed that in March 2015 the overall vacancy rate was 9.3%. Ten years later, as of March 21, it was 19%. The weather service did not immediately respond to a request for comment. Some northern and central stations such as Rapid City, South Dakota, with a 41.7% vacancy rate, Albany, New York, at 25%, Portland, Maine, at 26.1% and Omaha, Nebraska at 34.8% have been so short-staffed that they’ve curtailed weather balloon launches that said provide vital observations for accurate forecasts. The vacancies go beyond meteorologists who do forecasts. Twenty-three offices are without the meteorologist-in-charge who oversees the office. Sixteen have vacancies in the crucial warning coordination meteorologist job which makes sure emergency officials and the public prepare for oncoming weather disasters. The Houston office, with a 30% vacancy rate, is missing both those top positions, according to the data and the office’s own website. Houston has so much damage from flooding, hurricanes and even a derecho that their (damage) numbers are through the roof, said Bernadette Woods Placky, chief meteorologist for Climate Central and a former television meteorologist. The National Weather Service employees are still going to do everything they can to keep people safe and prepared. Its just that much harder and it puts lives at risk, Placky said. This time of the year and in this situation, this is when severe weather season peaks and were heading into the season of the biggest extremes with wildfires, with hurricanes, with extreme heat, which is our deadliest of all of extreme weathers. One weather service field office chief, who asked not to be identified because of fears of job loss, said the lack of technicians to fix radar and other needed equipment could be critically dangerous. People are bending over backwards to cope with the lack of staffing, the chief meteorologist said. The burden is going to kill us.” Northern Illinois atmospheric sciences professor Victor Gensini and others compared being stretched thin to cracks in aviation safety. “The question becomes, what falls through the cracks because theyre busy doing other things or theyre short-staffed,” Gensini said. Maybe they cant answer the phone to take a critical weather report thats coming in. Maybe theres so many storms in the counties that theyre responsible for that they cant physically issue warnings for every single storm because they dont have enough people working on the radar. These are all theoretical concerns, but its sort of like when you read about aircraft disasters and how they occur, Gensini said. Its the cascading of risk, right? Its the compounding, like the pilot was tired. The pilot missed the cue. Seth Borenstein, AP science writer The Associated Presss climate and nvironmental coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find APs standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org.
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