NEW YORK (AP) — The worldwide sell-off for financial markets slammed into a higher, scarier gear Friday.

The S&P 500 plummeted 6%, the Dow Jones Industrial Average plunged 5.5% and the Nasdaq composite dropped 5.8%. Markets are facing their worst crisis since the COVID crash after China matched President Donald Trump’s big raise in tariffs in an escalating trade war. Not even a better-than-expected report on the U.S. job market was enough to stop the slide.

The price of oil slid to its lowest level since 2001.

China’s response to U.S. tariffs caused an immediate acceleration of losses in markets worldwide. The Commerce Ministry in Beijing said it would respond to the 34% tariffs imposed by the U.S. on imports from China with its own 34% tariff on imports of all U.S. products beginning April 10. The United States and China are the world’s two largest economies.

Markets briefly recovered some of their losses after the release of Friday morning’s U.S. jobs report, which said employers accelerated their hiring by more last month than economists expected. It’s the latest signal that the U.S. job market has remained relatively solid through the start of 2025, and it’s been a linchpin keeping the U.S. economy out of a recession.

But that jobs data was backward looking, and the fear hitting financial markets is about what’s to come.

The central question looking ahead is: Will the trade war cause a global recession? If it does, stock prices will likely need to come down even more than they have already. The S&P 500 is down roughly 17% from its record set in February.

Trump seemed unfazed. From Mar-a-Lago, his private club in Florida, he headed to his golf course a few miles away after writing on social media that “THIS IS A GREAT TIME TO GET RICH.”

The Federal Reserve could cushion the blow of tariffs on the economy by cutting interest rates, which can juice things by encouraging companies and households to borrow and spend. But the Fed may have less freedom to move than it would like.

Fed Chair Jerome Powell said Friday that tariffs could also drive up expectations for inflation. That could be more damaging than high inflation itself, because it can drive a vicious cycle of behavior that only worsens inflation.

“Our obligation is to keep longer-term inflation expectations well anchored and to make certain that a one-time increase in the price level does not become an ongoing inflation problem,” Powell said.

That could indicate a hesitance to cut rates because lower rates can give inflation more fuel.

Much will depend on how long Trump’s tariffs stick and what kind of retaliations other countries deliver. Some of Wall Street is holding onto hope that Trump will lower the tariffs after prying out some “wins” from other countries following negotiations. Otherwise, many say a recession looks likely.

Trump has said Americans may feel “some pain” because of tariffs, but he has also said the long-term goals, including getting more manufacturing jobs back to the United States, are worth it. On Thursday, he likened the situation to a medical operation, where the U.S. economy is the patient.

“For investors looking at their portfolios, it could have felt like an operation performed without anesthesia,” said Brian Jacobsen, chief economist at Annex Wealth Management.

But Jacobsen also said the next surprise for investors could be how quickly tariffs get negotiated down. “The speed of recovery will depend on how, and how quickly, officials negotiate,” he said.