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By David French

April 4 (Reuters) - Wall Street nosedived for a second straight day on Friday, with the Nasdaq Composite confirming a bear market and the Dow Jones Industrial Average entering a correction, as an escalating global trade war spurred the biggest losses since the pandemic.

Fallout from U.S. President Donald Trump's sweeping tariffs stoked fears of a global recession, wiping trillions of dollars of value from U.S. companies. Declines on indexes were the heaviest since the pandemic during Trump's first term.

The Nasdaq Composite's .IXIC slide confirmed a bear market for the tech-heavy index, compared to its record closing high of 20,173.89 on December 16.

Meanwhile, the Dow Jones Industrial Average .DJI confirmed a correction to its record closing high of 45,014.04 on December 4.

Since late on Wednesday, when Trump boosted tariff barriers to their highest level in more than a century, investors have dumped stocks, fearing both the new U.S. economic reality and also how U.S. trading partners might retaliate by steepening their own trade barriers.

The CBOE Volatility index .VIX, or Wall Street's fear gauge, hit its highest level since August.

China's finance ministry said it would impose additional tariffs of 34% on all U.S. goods from April 10.

Markets then dropped further on talks between the prime ministers of Britain, Australia and Italy on how to respond to Trump's tariff salvo.

"Right now, how bad it gets depends on how committed the administration is to this set of policies which, clearly, the market is voting again," said Steve Sosnick, chief strategist at Interactive Brokers.

According to preliminary data, the S&P 500 .SPX lost 322.72 points, or 5.95%, to end at 5,073.80 points, while the Nasdaq Composite .IXIC lost 962.82 points, or 5.80%, to 15,587.79. The Dow Jones Industrial Average .DJI fell 2,237.52 points, or 5.52%, to 38,314.49.

Earlier, investment bank JP Morgan said it was forecasting a 60% chance of the global economy entering a recession by year-end, up from 40% previously.

Federal Reserve Chair Jerome Powell spoke publicly for the first time since Trump's tariff announcement. Powell highlighted that the unexpectedly hefty tariffs could trigger higher inflation and slower growth, setting the stage for challenging decisions for U.S. central bankers.

Traders still anticipated a more accommodative Fed policy, with money market futures pricing in cumulative rate cuts of 100 basis points by the end of 2025, compared with about 75 bps a week earlier.

Safe-haven buying in the bond market sent the yield on the benchmark 10-year Treasury notes US10YT=RR to touch a six-month intraday low. US/

This pushed U.S. bank stocks down further, with the sector under pressure globally, as the prospect of interest rate cuts from central banks and a hit to economic growth from tariffs would crimp profitability. The S&P Banks index .SPXBK dropped.

All 11 S&P sectors were down significantly, with energy .SPNY the leading laggard for the second straight day, as companies tracked a 7.3% decline in U.S. crude prices. O/R

U.S.-listed shares of Chinese companies dived, including JD.com JD.O and Alibaba BABA.N and Baidu BIDU.O.

Companies with exposure to China also fell across the board, with mega-caps such as Apple AAPL.O dropping.

The chipmakers index .SOX sank once again. The sector is particularly vulnerable to both China and U.S. tariffs as many chip companies design their chips in the U.S., but have them manufactured in China, potentially hitting them with a double-whammy of levies.

(Reporting by Sruthi Shankar and Pranav Kashyap in Bengaluru and David French in New York; Editing by Shounak Dasgupta, Anil D'Silva and David Gregorio)

((sruthi.shankar@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 6182 2787))