Updates to late New York morning

By Caroline Valetkevitch and Harry Robertson

NEW YORK/LONDON, April 4 (Reuters) - Global stock markets tumbled and oil prices dropped for a second day on Friday, with the Nasdaq Composite heading toward a bear market, as China struck back against U.S. President Donald Trump's tariffs and worries mounted over a global trade war.

Data showing the U.S. economy added far more jobs than expected in March did little to brighten the mood.

Responding to Trump's tariffs, China on Friday said it would impose additional levies of 34% on American goods, confirming investor fears that a full-blown global trade war is under way.

Trump on Wednesday slapped a 10% tariff on most U.S. imports and much higher levies on dozens of countries, erecting the steepest trade barriers in more than 100 years.

"It's sort of the worst fears of where the tariff program was headed," said Rick Meckler, partner, Cherry Lane Investments, a family investment office in New Vernon, New Jersey.

"For those investors who were sure it was just a negotiation - while that still may be true at some point - it's getting awfully deeper into the detail and more dangerous for companies."

Worries over a global recession drove U.S. oil prices down 8%, while investors rushed towards the safety of government bonds and traders ramped up bets on rate cuts from the Federal Reserve and other major central banks.

Companies with exposure to China also fell. Apple AAPL.O, Nvidia NVDA.O and Amazon.com AMZN.O all were down sharply.

Bank shares dropped across the globe as fears of a recession increased. The S&P 500 financial index .SPSY was down 5.1% on Friday.

The Dow Jones Industrial Average .DJI fell 1,230.72 points, or 3.04%, to 39,315.21, the S&P 500 .SPX fell 190.89 points, or 3.54%, to 5,205.34 and the Nasdaq Composite .IXIC fell 604.27 points, or 3.59%, to 15,954.66.

MSCI's gauge of stocks across the globe .MIWD00000PUS fell 30.80 points, or 3.81%, to 776.84. The pan-European STOXX index .STOXX, was down 5.2%.

Japan's Nikkei 225 .N225 fell 2.8% overnight for a second session running.

U.S. crude CLc1 was down 8.5% at $61.24 a barrel and Brent LCOc1 fell to $64.77 per barrel, down 7.66% on the day.

The U.S. dollar recovered against the euro and trimmed losses versus the yen on Friday, after the non-farm payrolls data. The dollar index =USD was up 0.5% on Friday after having its biggest fall since November 2022 on Thursday.

Nonfarm payrolls increased by 228,000 jobs last month, while economists had forecast payrolls advancing by 135,000 jobs.

The euro EUR= was last down 0.47% against the dollar at $1.0998. Against the Japanese yen JPY=, the dollar weakened 0.4% to145.47.

After years of huge flows into U.S. stocks and a booming American economy, investors are grappling with where to put their cash.

That helped drive a powerful rush towards government bond markets. The yield on the benchmark U.S. 10-year Treasury note US10YT=TWEB fell 12.2 basis points to 3.933% after falling to a six-month low of 3.86%. Yields move inversely to prices.

Traders are anticipating more accommodative policies from central banks. Money market futures were pricing in cumulative rate cuts of 110 basis points from the Federal Reserve by the end of this year, compared with about 75 bps a week earlier.

Traders increased their bets on Bank of England and European Central Bank reductions too.

"A lot of investors I've talked to have just said in this kind of environment, let's go to cash and just wait it out," Meckler said.

(Reporting by Caroline Valetkevitch in New York and Harry Robertson in London; additional reporting by Rae Wee in Singapore; Editing by Sharon Singleton, Hugh Lawson, Peter Graff, Alsion Williams and Chizu Nomiyama)

((caroline.valetkevitch@thomsonreuters.com))