Markets Tumble as U.S.-China trade War Intensifies
On Friday, Bitcoin, altcoins, and the stock market took a hit as the U.S.-China trade war heated up. Bitcoin’s price fell to $82,000, while Ethereum dipped below $1,800. The total market cap of all cryptocurrencies dropped to $2.64 trillion.
The stock market also suffered, with futures tied to major indices like the Dow Jones, S&P 500, and Nasdaq 100 falling over 3%. This indicates a correction in thes key indices.
The decline was triggered by China’s retaliatory measures against the U.S. Beijing imposed a 34% tariff on U.S. imports and restricted exports of rare earth minerals. It also halted sorghum imports from U.S. companies and added 11 american firms to it’s unreliable entity list.
These actions are the strongest response to Donald Trump’s Liberation Day tariffs.The U.S. has warned of reciprocal tariffs on any country that retaliates. The trade war has increased recession fears, with Polymarket data showing a 56% chance of a recession.
Investor sentiment has turned extremely negative.The CNN Money Fear and greed Index dropped to 6, the lowest sence the COVID-19 pandemic. Billionaire Bill Gross advised against buying the dip,calling it an “epic economic and market event.”
Markets also weakened after the U.S. released the latest nonfarm payrolls (NFP) report.Unemployment rose to 4.2% in March, and the economy added 228,000 jobs.However, the manufacturing sector created just 1,000 jobs.
The bond market is signaling expectations of lower interest rates. If the Federal Reserve cuts rates, it could be positive for Bitcoin, altcoins, and the broader stock market.
