(Updates throughout after U.S. nonfarm payrolls, adds investor

comment and chart)

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Stocks extend global selloff after China retaliates

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European stocks set for worst day since pandemic

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Traders ramp up bets on Fed, BoE, ECB rate cuts

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Trump's tariffs send investors running to safe havens

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Live coverage of the latest developments on

tariffs

By Harry Robertson

LONDON, April 4 (Reuters) - Global stocks tumbled for a

second day on Friday as U.S. President Donald Trump's sweeping

tariff plans sowed fears about a global recession, with the

sell-off deepening after China said it would impose additional

levies of 34% on American goods.

Oil prices dropped as investors fretted about global growth

and rushed towards the safety of government bonds and the

Japanese yen, while traders ramped up their bets on steep rate

cuts from the Federal Reserve and other major central banks.

Trump on Wednesday slapped a 10% tariff on most U.S. imports

and much higher levies on dozens of countries, erecting the

steepest trade barriers in more than 100 years. China's response

in kind on Friday confirmed investors' worst fears that a

full-blown global trade war is under way.

"The market is doing one thing: pricing in a global

recession," said George Saravelos, global head of FX research at

Deutsche Bank.

Data on Friday showing the U.S. economy added far more jobs

than expected in March did little to brighten the mood.

Europe's STOXX 600 was down 4.2% after sliding on

Thursday and was on track for its biggest daily fall since the

COVID-19 pandemic in 2020. Japan's Nikkei 225 fell 2.8%

overnight for a second session running.

Futures for the U.S. S&P 500 slumped 2.5% after the

cash index plunged 4.8% on Thursday - the biggest drop since

2020 - while Nasdaq futures were down 2.6%.

"If we start seeing negotiations taking place, or Trump

dialling back on some of these tariffs, that is the only

possible route to allow for an abatement of the sell-off," said

Aneeka Gupta, equity strategist and economist at WisdomTree.

"But for now that seems very unlikely."

The VIX index, a closely watched measure of expected

volatility in U.S. stocks, rose sharply to the highest since

August, at 38.

Brent crude oil fell to the lowest in four years

below $65 a barrel.

SAFE HAVENS RALLY

Traders on Friday were pricing in almost 110 basis points of

Federal Reserve rate cuts this year, up from around 75 basis

points on Wednesday, and increased their bets on Bank of England

and European Central Bank reductions too.

After years of huge flows into U.S. stocks and a booming

American economy, investors are grappling with where to put

their cash.

That helped drive a powerful rush towards government bond

markets, where the 10-year U.S. government bond, or Treasury,

yield was down 15 basis points to 3.92%, after

falling 14 basis points on Thursday. Yields move inversely to

prices.

Lower interest rates - which dent lenders' margins - and

worries about growth battered banking stocks, with the STOXX 600

banking index slumping 8% after a sharp sell-off of Wall

Street lenders on Thursday.

The most obvious sign of nerves about the health of the U.S.

economy and markets was a 1.9% drop in the dollar index

on Thursday, the biggest fall since November 2022.

The dollar initially rebounded somewhat on Friday, but that

faded after the China tariff announcement. The euro

was last up 0.1% after rallying 1.9% on Thursday, with the

dollar index flat.

The Japanese yen and Swiss franc, safe-haven currencies,

rose around 0.4% and 0.8% respectively . The

Australian dollar - sometimes seen as a barometer of

investors' risk appetite and a proxy for the Chinese yuan -

plunged 3.2%.

Michael Metcalfe, head of global strategy at State Street

Global Markets, said the weakness in the dollar this week was

striking.

"It's almost like the reverse TINA trade," Metcalfe said.

"The original TINA trade was, there is no alternative to the

U.S., and everyone suddenly wants to reduce their risk in the

U.S."