NEW YORK (AP) — Stock markets worldwide are careening even lower Friday after China matched President Donald Trump’s big raise in tariffs in an escalating trade war. 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 S&P 500 was down 5% in morning trading, coming off its worst day since COVID wrecked the global economy in 2020. The Dow Jones Industrial Average was down 1,656 points, or 4.2%, as of 10:50 a.m. Eastern time, and the Nasdaq composite was 5.5% lower.

So far there are few, if any winners, in financial markets from the trade war. European stocks saw some of the day’s biggest losses, with indexes sinking roughly 5%. 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.

China’s 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 by imposing a 34% tariff on imports of all U.S. products beginning April 10. The United States and China are the world’s two largest economies.

Markets briefly recovered some of their losses after the release of Friday morning’s U.S. jobs report, which said employers accelerated their hiring by more last month than economists expected. It’s the latest signal that the U.S. job market has remained relatively solid through the start of 2025, and it’s 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 what’s 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 is: Will the trade war cause a global recession? If it does, stock prices will likely need to come down even more than they have already. The S&P 500 is down roughly 16% from its record set in February.

Much will depend on how long Trump’s 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 out some “wins” from other countries following negotiations. Otherwise, many say a recession looks likely.

For his part, 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.

Vietnam said its deputy prime minister would visit the U.S. for talks on trade, while the head of the European Commission has vowed to fight back. Others have said they were hoping to negotiate with the Trump administration for relief.

Trump criticized China’s retaliation on Friday, saying on his Truth Social platform that “CHINA PLAYED IT WRONG, THEY PANICKED – THE ONE THING THEY CANNOT AFFORD TO DO!”

On Wall Street, stocks of companies that do lots of business in China fell to some of the sharpest losses.

DuPont dropped 16.8% after China said its regulators are launching an anti-trust investigation into DuPont China group, a subsidiary of the chemical giant. It’s one of several measures targeting American companies and in retaliation for the U.S. tariffs.

GE Healthcare got 14.3% of its revenue last year from the China region, and it fell 13.3%. United Airlines, which is in an alliance with Air China and got a third of its passenger revenue last year from flights across the Pacific, lost 12.6%.

In the bond market, Treasury yields continued their sharp drop as worries rise about the strength of the U.S. economy, along with expectations for the Federal Reserve to cut interest rates to cushion it.

The yield on the 10-year Treasury tumbled to 3.90% from 4.06% late Thursday and from roughly 4.80% early this year. That’s a major move for the bond market.

The Fed could cut its main interest rate to relax the pressure on the economy, as it was doing late last year before pausing in 2025. But it may have less freedom to move than it would like.

Lower rates can goose the economy by making it easier for U.S. companies and households to borrow and spend. But they can also push upward on inflation. And worries are already worsening about that because of tariffs, with U.S. households in particular bracing for sharp increases to their bills.

In stock markets abroad, Germany’s DAX lost 5.2%, France’s CAC 40 dropped 4.6% and Japan’s Nikkei 225 fell 2.8%.

AP Writers Jiang Junzhe, Huizhong Wu and Matt Ott contributed.