The Dow Jones Industrial Average fell 572.73 points, or 2.34 percent, to 23,932.49, the S&P 500 lost 58.4 points, or 2.19 percent, to 2,604.44 and the Nasdaq Composite dropped 161.44 points, or 2.28 percent, to 6,915.11.
The S&P 500's industrials sector also pared losses but was still down 0.2 percent in late afternoon trading. Only two of the most active US stocks premarket were higher. While the U.K.'s FTSE 100 Index surged up by 2.4 percent, the French CAC 40 Index and the German DAX Index soared by 2.6 percent and 2.9 percent, respectively.
Omar Aquilar, Chief Investment Officer at Charles Schwab in San Francisco, said equity investors may have reacted too soon as fixed income and currency markets appeared unperturbed by the exchange between China and the United States.
Separately, Brookstone Capital Management bought a new stake in shares of Direxion Daily S&P 500 Bull 1.25X Shares in the 4th quarter worth approximately $5,814,000.
The U.S. and China have recently engaged in tit-for-tat tariff announcements, although traders seem optimistic that the threats are only a precursor to negotiations of a trade agreement between the two countries.
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Pending an unusual break in the case, O'Connor said that the case may be listed as inactive soon - possibly in a month's time . As days went on, internet rumors circulated that the case was tied to his alleged role as a flu vaccine whistle-blower.
Industrial companies were especially hard hit by the escalation in trade tensions Friday.
Shares of chemicals and mining companies, some of which have stumbled since the steel and aluminium tariffs were first unveiled, were also in demand.
Also, the March non-farm payrolls report showed the US adding 103K jobs, missing headline expectations by a wide margin. Shares of Boeing, the single largest USA exporter to China, tumbled 4.6 percent.
U.S. Treasury prices are higher following the jobs report, with the benchmark 10-year yield up 3 bps to 2.80%. The Philadelphia semiconductor index fell 0.54 per cent. Visit MarketWatch.com for more information on this news.
The Cboe Volatility Index, the most widely followed barometer of expected near-term volatility for the S&P 500, was down 0.13 point at 20.97.