U.S. stock indexes experienced their sharpest weekly losses since March 2020, driven by escalating trade tensions after the U.S. imposed new tariffs and several key trading partners retaliated. The S&P 500 fell over 9% for the week, dropping 17% below its record high from just six weeks earlier. The NASDAQ and Dow posted losses of approximately 10% and 8%, respectively.

The arrival of spring brought bear markets, with the NASDAQ and a U.S. small-cap index both slipping into bear territory. The Russell 2000 fell 20% from its November 2024 peak, while the NASDAQ crossed the same threshold from its December high.

Federal Reserve Chair Jerome Powell warned on Friday that the latest tariffs could drive inflation higher than previously projected. While he noted the U.S. economy remains “in a good place,” Powell acknowledged that the scale and impact of the tariffs are proving to be “significantly larger than expected.”

Amid the stock market turbulence, U.S. government bonds saw their strongest weekly rally in over seven months, pushing yields lower. The 10-year Treasury yield briefly dipped below 4.00% on Friday for the first time in half a year, down from its mid-January high of 4.80%.

Oil prices also plunged, with U.S. crude ending the week at its lowest level since April 2021—around $62 per barrel. The more than 10% drop marked the steepest weekly decline since 2023, with most of the sell-off occurring on Thursday and Friday. Just a few months ago, oil was trading near $80.

The U.S. dollar weakened alongside rising trade friction. A broad index measuring the dollar’s value against other major currencies dropped as much as 2.5% on Thursday before regaining some ground. For the week, the dollar lost about 1.0%, extending its year-to-date decline to 5.0%.

Despite the market volatility, the labor market showed strength. The U.S. government reported a stronger-than-expected gain of 228,000 jobs in March—well above economists’ forecasts and nearly double February’s revised figure of 117,000. The March total also surpassed the 12-month average of 158,000.

The year’s first quarter ended on a sour note for equities, with the S&P 500 logging its worst quarterly performance since 2022. The index finished the quarter down about 4.6%, and its 5.8% drop in March was the largest monthly decline since September 2022, according to S&P Dow Jones Indices.