S&P 500 Suffers Sharp Weekly Drop as Trade Tensions Intensify: Fears of Global Recession Mount

By Business Access TV (BATV) Newsroom
April 7, 2025

The U.S. stock market took a sharp hit this week, with the S&P 500 tumbling 9.1% amid mounting fears that President Donald Trump’s sweeping reciprocal tariffs could derail global economic growth and drive inflation higher.

The S&P 500 closed Friday at 5,074.08, down 5.8% for the month of March and posting a quarterly decline of 4.6%. The benchmark index has now shed 13.7% since the beginning of the year, marking one of its worst starts in recent history.

Market sentiment turned bearish following the White House’s announcement of 10% blanket tariffs on all countries, set to take effect Saturday. Additional tariffs targeting key partners such as China and Japan further rattled investors. Canada and Mexico, the U.S.’s largest trading allies, had already been subject to earlier rounds of tariffs. Of particular concern is the steep 54% tariff the U.S. will impose on Chinese imports starting April 9.

In retaliation, China has announced plans to slap a 34% tariff on U.S. goods beginning April 10. Beijing also revealed restrictions on the export of critical rare-earth minerals and blacklisted 11 American companies by adding them to its “unreliable entity” list.

The tit-for-tat trade war has raised fresh fears of a looming global recession, pushing all 11 sectors of the S&P 500 into negative territory this week. The energy sector suffered the steepest loss at 14%, followed by a brutal 11% drop in technology stocks, a 10% slide in financials, and a 9.4% fall in industrials.

Among individual stocks, energy firm APA Corporation plunged 27% following downward price target revisions from Capital One and Wolfe Research, citing market uncertainty. In tech, Micron Technology tumbled 26% as investors worried about growing pressure on U.S.-based chipmakers—including Intel, GlobalFoundries, and Texas Instruments—to expand domestic production or risk losing federal funding.

The financial sector was also rocked, with KKR falling 19%. The private equity giant, alongside EQT and FTV Capital, led a $500 million funding round for cybersecurity firm ReliaQuest, aimed at expanding its AI-powered threat defense platform and global operations.

Meanwhile, economic data offered mixed signals. The U.S. trade deficit narrowed more than expected in February to $122.7 billion, down from $130.7 billion in January, according to the Census Bureau and the Bureau of Economic Analysis.

However, the labor market showed signs of cooling. The March employment report revealed a stronger-than-anticipated 228,000 job gain in nonfarm payrolls, though this was dampened by a net downward revision of 48,000 jobs across January and February. The unemployment rate inched up to 4.2%, slightly above market expectations.

Looking ahead, investors will turn their attention to the Q1 earnings season, which begins next week. Major companies set to report include JPMorgan Chase (JPM), Wells Fargo (WFC), Progressive (PGR), BlackRock (BLK), Constellation Brands (STZ), and Delta Air Lines (DAL). Key economic releases include consumer credit data for February, and both the Consumer Price Index (CPI) and Producer Price Index (PPI) for March.

As the U.S. steps further into uncertain geopolitical and economic territory, all eyes will be on Washington and Beijing—and how markets respond to each new twist in the ongoing trade saga.

For feedback: contact the BATV Editorial Division at: info@batvja.com