Markets Slide as Fresh Tariff Threats Stir Investor Anxiety

Financial markets took a sharp downturn Friday following renewed threats of aggressive tariffs, sparking fresh concerns about global trade stability. The sudden shift in tone caught investors off guard, pushing stocks and the dollar lower while sending volatility and gold prices sharply higher.

The selloff began early in the day, triggered by public statements indicating plans to impose steep import duties targeting major international partners and key multinational firms. Equity markets opened deep in the red, with the Dow dropping as much as 600 points in premarket trading. Losses narrowed later in the session after reassurances from U.S. officials about potential upcoming trade deals and talks, but the broader damage remained.

By the closing bell, the Dow had shed 256 points, or 0.61%, while the S&P 500 fell 0.67% and the Nasdaq declined 1%. All three indexes ended the week lower, with the S&P 500 recording its most significant weekly decline in seven weeks.

The return of tariff tensions disrupted a brief period of investor optimism that had stemmed from earlier trade negotiations and softening rhetoric. Instead, the latest developments reminded Wall Street that policy uncertainty — especially around trade — remains a persistent risk.

Market volatility surged, with the VIX rising 8% by the afternoon after spiking over 20% earlier in the day. The U.S. dollar index dropped 0.8%, marking its worst single-day performance in a month and worst weekly decline in six weeks. Meanwhile, gold prices jumped 2% as investors sought refuge in safe-haven assets.

The renewed threat of escalating trade barriers, especially those targeting core trading relationships and influential companies, has reintroduced a level of unpredictability that investors had hoped was behind them. With past pauses in tariff escalation proving temporary, many are bracing for continued volatility and cautious positioning in the weeks ahead.