US equity indexes plummeted, with the Dow plunging more than 1,450 points in midday trading Friday, as the likelihood of an interest-rate cut in May almost doubled after China retaliated against the Trump administration's punitive import levies.

The Nasdaq slumped 4.7% to 15,781.2, with the S&P 500 down 4.2% to 5,171.9 and the Dow 3.7% lower at 39,043.6 after midday Friday. All sectors slumped intraday, with financials, materials, and technology emerging as the steepest decliners.

China, now subject to tariffs of more than 50% on its exports to the US, imposed a 34% levy on imports from the US on Friday. Canadian Prime Minister Mark Carney announced Thursday a limited set of countermeasures against US tariffs, imposing a 25% tariff on all vehicles imported from the US that are not compliant with a trade deal among Mexico, Canada, and the US.

"The preliminary estimate of the negative impact of US tariffs from our economists is at least 50 (basis points) on global GDP [gross domestic product] growth and potentially twice as much," UBS said in a note. "We estimate this would imply 250-500kb/d negative impact on oil demand growth, close to half of our 2025 growth forecast of 1.1Mb/d at the upper end."

West Texas Intermediate crude oil futures plunged 9% to $60.94 a barrel.

The probability of a 25 basis-point interest-rate cut in May soared to 42% by Friday afternoon, from 22% a day ago, the CME Group's FedWatch Tool showed. All US Treasury yields dropped intraday, with the 10-year yield sliding 14.7 basis points to 3.91% and the two-year rate 20 basis points lower at 3.53%.

Shares of all companies in the Magnificent-7 stable dropped, with Tesla (TSLA) and Nvidia (NVDA) leading the decliners, down 6.4% and 7.6%, respectively.

"If these tariffs went into place at current form overall tech earnings would come down 15% at least, the supply chain will be a Rubik's Cube rivaling Covid days, and the economy would go into a recession/stagflation," Wedbush Securities analysts, including Daniel Ives, said in a note. "We assume tariff negotiations start now otherwise dark days are ahead for tech...and US consumers pay the price for this."