Bank of America (BAC) shares plummeted 5.13% in pre-market trading on Friday, as the escalating trade war between the United States and China sent shockwaves through the financial sector. The sharp decline comes amid broader concerns about a potential recession triggered by President Trump's sweeping tariff plans and China's retaliatory measures.

The selloff in Bank of America's stock is part of a larger trend affecting major US banks. Investors are increasingly worried about the impact of the trade dispute on economic growth and bank profitability. China's announcement of 34% import tariffs on all US goods, in response to Trump's tariff plans, has further intensified these concerns.

Financial institutions are particularly vulnerable to economic downturns, as they can lead to reduced loan demand, increased delinquencies, and a slowdown in merger and acquisition activities. The KBW Nasdaq Bank Index tumbled 9.9% in the previous session, reflecting the widespread anxiety in the banking sector. Analysts are now predicting that if the current slate of tariffs holds, a recession in the second or third quarter is increasingly likely.

As Bank of America and its peers prepare to report their quarterly results next week, investors will be closely watching for any signs of how the escalating trade tensions might impact the bank's future performance and guidance. The financial sector's reaction to these geopolitical developments serves as a critical indicator of broader market sentiment and economic outlook.