Dow set to tumble 1,500 points after China retaliates against Trump’s tariffs

US stocks were set to plunge Friday after China retaliated against the United States for President Donald Trump’s tariffs.

US stocks were set to plunge Friday after China retaliated against the United States for President Donald Trump’s tariffs. Dow futures fell 1,500 points, or 3.7%. The broader S&P 500 was set to open 3.7% lower, on pace to enter correction territory — a decline of 10% from a recent peak. The tech-heavy Nasdaq Composite, already in correction, was on pace to start the day 4% lower and is flirting with bear-market territory — a decline of 20% from its peak. Investors had been fearful that a dramatic escalation of the trade war could plunge the US and global economies into a recession. JPMorgan analysts said Thursday that America’s economy and the broader world economy both had a 60% chance of sinking into a recession this year. The analysts also said odds of a recession would rise if countries began to retaliate against the United States — and China did so Friday. Retaliation raises the risk of further escalation and could diminish hopes for negotiation. “Markets may actually be underreacting, especially if these rates turn out to be final, given the potential knock-on effects to global consumption and trade,” said Matt Burdett, head of equities at Thornburg Investment Management. “The tariffs have injected a level of uncertainty and volatility we haven’t seen since the early days of the pandemic.” Traders ditched risky stocks, especially tech companies whose products are manufactured overseas and could soon be subject to enormous tariffs. Apple (AAPL), which tumbled more than 9% Thursday, was down another 5% Friday in premarket trading. Amazon (AMZN) was 7% lower. Instead, they poured money into traditional safe havens, including government bonds and gold.