Stocks around the world plunged Friday as investors feared that a trade conflict between the U.S. and China, the biggest economies in the world, would escalate. A second day of big losses pushed U.S. stocks to their worst week in two years.
Investors fear that if China responds in kind to sanctions on $60 billion worth of Chinese imports the White House announced on Thursday, it will be a first step toward a full-blown trade war that could damage the global economy and slash profits at big U.S. exporters like Apple and Boeing.
The market’s two biggest sectors slumped the most. Technology stocks have made enormous gains over the past year, but since they do so much business outside the U.S., investors see them as particularly vulnerable in a trade dispute. The sector dropped 7.9 percent this week.
Banks also fell sharply. Amid the trade-war rumblings, investors fled to the safety of bonds and drove down yields, a potential negative for bank profits. That marked a reversal from earlier