*

Futures down: S&P 500 2.49%, Nasdaq 100 2.6%, Dow 2.6%

*

March payrolls beat expectations

*

Fed chair Jerome Powell's speech at 11:25 am ET

(Updates with prices before opening bell)

By Sruthi Shankar and Pranav Kashyap

April 4 (Reuters) -

U.S. stocks were set to open sharply lower on Friday,

signaling another round of selloff on Wall Street, after China

imposed fresh tariffs on all U.S. goods in response to the Trump

administration's

sweeping levies

, escalating a global trade war.

China's finance ministry

said

it would impose additional tariffs of 34% on all U.S. goods

from April 10 after U.S. President Donald Trump raised tariff

barriers to their highest level in more than a century this

week.

The tariffs have sent shockwaves through global

financial markets, raising fears of a worldwide economic

downturn and sharp price hikes across sectors in the world's

biggest consumer market.

U.S.-listings of Chinese companies dived in premarket

trading. JD.com dropped 9.1%, while Alibaba fell

8.3% and Baidu shed 7.6%.

At 8:47 a.m., futures tracking the tech-heavy Nasdaq 100

were down 485.5 points, or 2.6%. They have fallen 20%

from their all-time highs hit in December, marking a bear

market.

S&P 500 e-minis were down 137.5 points, or

2.49%, and Dow E-minis fell 1,069 points, or 2.62%.

The CBOE Volatility index, known as Wall Street's

fear gauge, hit its highest level since August 2024 at 38.49

points.

"We're beginning to see the inevitable retaliation from

the global trade partners of the United States. The risk is that

this tips a recession scare into a full-blown recession," said

Ben Laidler, head of equity strategy at Bradesco BBI.

Companies with exposure to China fell across the board,

with mega-caps such as Apple ( AAPL ) falling 4.7%. Nvidia ( NVDA )

lost 3.4% and Amazon.com lost 6%.

The benchmark S&P 500 dropped 4.8% on Thursday, its

largest one-day percentage decline since June 2020, after Trump

imposed a 10% tariff on most imports into the United States and

much higher levies on dozens of other countries.

The tech-heavy Nasdaq closed down 6% in the prior

session, its biggest one-day drop since the height of the

pandemic-fueled selloff in March 2020.

U.S. bank stocks dropped further on Friday, with the sector

under pressure globally as investors anticipated more interest

rate cuts from central banks and a hit to economic growth from

tariffs.

Bank of America ( BAC ), JPMorgan Chase ( JPM ) and

Citigroup ( C/PN ) all fell around 5% each. The yield on the

benchmark 10-year Treasury notes was down to a

six-month low of 3.936%.

A Labor Department report showed the U.S. economy added far

more jobs than expected in March but Trump's sweeping import

tariffs could test the labor market's resilience in the months

ahead amid sagging business confidence.

Nonfarm payrolls increased by 228,000 jobs last month after

a downwardly revised 117,000 rise in February. Economists had

forecast payrolls advancing by 135,000 jobs.

Focus will also be on Fed Chair Jerome Powell's speech at

11:25 a.m. ET for clues on the path of interest rates.

Traders continued to anticipate a more accommodative policy

from the U.S. central bank, with money market futures pricing in

cumulative rate cuts of 110 basis points by the end of this

year, compared with about 75 bps a week earlier.

"Looking at cross-asset reactions, the market is actually

pricing in the real risk of a recession here," Laidler said.