01:21 PM EDT, 04/04/2025 (MT Newswires) -- US equity indexes plummeted along with government bond yields on Friday amid concerns that a surge in bets favoring an interest rate cut in May reflect a risk to economic growth following China's retaliation against the Trump administration's import levies.

The Nasdaq slumped 5.4% to 15,647.4, with the S&P 500 down 5.4% to 5,102.2 and the Dow 4.8% lower at 38,617.3 after midday Friday. All sectors slumped intraday, with energy, financials, materials, and technology emerging as the steepest decliners.

China, now subject to tariffs of more than 50% on its exports to the US, imposed a 34% levy on imports from the US on Friday. Canadian Prime Minister Mark Carney announced Thursday a limited set of countermeasures against US tariffs, imposing a 25% tariff on all vehicles imported from the US that are not compliant with a trade deal among Mexico, Canada, and the US.

"The preliminary estimate of the negative impact of US tariffs from our economists is at least 50 (basis points) on global GDP [gross domestic product] growth and potentially twice as much," UBS said in a note. "We estimate this would imply 250-500kb/d negative impact on oil demand growth, close to half of our 2025 growth forecast of 1.1Mb/d at the upper end."

West Texas Intermediate crude oil futures plunged 7.9% to $61.67 a barrel.

The probability of a 25 basis-point interest-rate cut in May from the Federal Reserve soared to 42% by Friday afternoon, from 22% a day ago, the CME Group's FedWatch Tool showed. All US Treasury yields dropped intraday, with the 10-year yield sliding 11.1 basis points to 3.94% and the two-year rate 11 basis points lower at 3.61%.

The ICE US Dollar Index rose 0.7% to 102.83, reflecting haven buying.

Shares of the biggest US banks fell amid concern that Trump's tariffs will lead to a recession. Goldman Sachs ( GS ) shares slumped 8% intraday, among the worst performers on the Dow.

Shares of all companies in the Magnificent-7 stable dropped, with Tesla (TSLA) and Nvidia ( NVDA ) leading the decliners, down 10.2% and 7.8%, respectively.

"If these tariffs went into place at current form overall tech earnings would come down 15% at least, the supply chain will be a Rubik's Cube rivaling Covid days, and the economy would go into a recession/stagflation," Wedbush Securities analysts, including Daniel Ives, said. "We assume tariff negotiations start now otherwise dark days are ahead for tech."

In US economic news, the March employment report showed nonfarm payrolls rose 228,000, above the 140,000 increase expected in a survey compiled by Bloomberg. But, February payrolls saw a downward revision to a 117,000 gain, and January payrolls were revised down to a 111,000 expansion, for a net downward revision of 48,000, according to a report from the Bureau of Labor Statistics on Friday.

The unemployment rate rose to 4.2% in March from 4.1% in February, above the 4.1% expected. Hourly earnings rose, as expected, by 0.3% versus a 0.2% increase in February. Hourly earnings were up 3.8% year-over-year, slower than the 4% gain in the prior month.

Gold futures sank 2.6% to $3,040.91 per ounce. Silver futures slumped 8.6% to $29.26 per ounce.