The Dow Jones industrial average closed 572 points lower, a 2.3 percent decrease, while the Nasdaq and S&P 500 index dropped 2.3 percent and 2.2 percent, respectively. The Dow is down 10.1% from its January closing high, technically in correction. Beijing fired back hours later by threatening tariffs on $50 billion worth of United States goods, including cars, planes, and soybeans.
"We've gone from Larry Kudlow trying to calm the markets down to the administration saying, 'Hey, ignore the markets, '" Hogan said.
China's commerce ministry said it would respond commensurate to U.S. action.
"These potential trade wars are not good for the market", said Stephen Massocca, senior vice president at Wedbush Securities in San Francisco. He stressed that the US tariffs on China were simply proposals, still to be vetted by trade officials and open to public comment.
Over the course of the day 9,408 shares traded hands, as compared to an average volume of 3,770 over the last 30 days for Horizons S&P 500 Covered Call ETF (NYSEARCA:HSPX).
"I think it shows a willingness to go to the mat on this and fight it out", he said.
Industrial companies might face the worst pain from tariffs, as they could find themselves dealing with higher costs for components imported into the US while the duties on their goods in China harm their sales.
Donald Trump claims China will 'take down' trade barriers
On Friday, Kudlow said that the USA and China are holding "back-channel discussions" to resolve the escalating trade dispute. President Trump expresses confidence the trade dispute with China will be mutually beneficial.
Investors fear a trade war because it will restrict the flow of goods between the nations, which will not only hurt sales and corporate profits but also dent investor confidence.
The Fed is on track to raise rates three times this year, but it could speed up the increases to keep the economy from overheating.
In U.S. economic news, the government reported that American employers added 103,000 jobs in March, below the 185,000 jobs analysts had forecast.
"Our view remains that a negotiated solution is most likely, and so the tariffs ultimately won't be implemented or will be much milder if they are", said Shane Oliver, head of investment strategy at AMP Capital in Sydney. Investors were watching that number because it's a barometer of inflation.
"We're going to need brand new, bad news on trade for the equity markets to push lower".
The yield on the benchmark 10-year Treasury note settled at 2.830%, up from 2.788% on Wednesday.