(Updates to late New York morning)

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Stocks extend global selloff after China retaliates

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

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Live coverage of the latest developments on

tariffs

By Caroline Valetkevitch and Harry Robertson

NEW YORK/LONDON, April 4 (Reuters) -

Global stock markets tumbled and oil prices dropped for a

second day on Friday, with the Nasdaq Composite heading toward a

bear market, as China struck back against U.S. President Donald

Trump's tariffs and worries mounted over a global trade war.

Data showing the U.S. economy added far more jobs than

expected in March did little to brighten the mood.

Responding to Trump's tariffs, China on Friday said it

would impose additional levies of 34% on American goods,

confirming investor fears that a full-blown global trade war is

under way.

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.

"It's sort of the worst fears of where the tariff program

was headed," said Rick Meckler, partner, Cherry Lane

Investments, a family investment office in New Vernon, New

Jersey.

"For those investors who were sure it was just a

negotiation - while that still may be true at some point - it's

getting awfully deeper into the detail and more dangerous for

companies."

Worries over a global recession drove U.S. oil prices down

8%, while investors rushed towards the safety of government

bonds and traders ramped up bets on rate cuts from the Federal

Reserve and other major central banks.

Companies with exposure to China also fell. Apple ( AAPL ),

Nvidia ( NVDA ) and Amazon.com ( AMZN ) all were down sharply.

Bank shares dropped across the globe as fears of a

recession increased. The S&P 500 financial index was

down 5.1% on Friday.

The Dow Jones Industrial Average fell 1,230.72

points, or 3.04%, to 39,315.21, the S&P 500 fell 190.89

points, or 3.54%, to 5,205.34 and the Nasdaq Composite

fell 604.27 points, or 3.59%, to 15,954.66.

MSCI's gauge of stocks across the globe

fell 30.80 points, or 3.81%, to 776.84. The pan-European STOXX

index, was down 5.2%.

Japan's Nikkei 225 fell 2.8% overnight for a second

session running.

U.S. crude was down 8.5% at $61.24 a barrel and Brent

fell to $64.77 per barrel, down 7.66% on the day.

The U.S. dollar recovered against the euro and trimmed

losses versus the yen on Friday, after the non-farm payrolls

data. The dollar index was up 0.5% on Friday after having

its biggest fall since November 2022 on Thursday.

Nonfarm payrolls increased by 228,000 jobs last month, while

economists had forecast payrolls advancing by 135,000 jobs.

The euro was last down 0.47% against the dollar

at $1.0998. Against the Japanese yen, the dollar weakened

0.4% to145.47.

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. The yield on the benchmark U.S. 10-year Treasury note

fell 12.2 basis points to 3.933% after falling to

a six-month low of 3.86%. Yields move inversely to prices.

Traders are anticipating more accommodative policies

from central banks. Money market futures were pricing in

cumulative rate cuts of 110 basis points from the Federal

Reserve by the end of this year, compared with about 75 bps a

week earlier.

Traders increased their bets on Bank of England and European

Central Bank reductions too.

"A lot of investors I've talked to have just said in

this kind of environment, let's go to cash and just wait it

out," Meckler said.