NEW YORK (AP) -- A global sell-off in stocks came back around to the United States in early trading Friday after President Donald Trump doubled down on "trade war" talk. The Standard & Poor's 500 was on pace to close out the week with a sizeable loss that would put it in negative territory for the year.
Trump took to Twitter to defend his promise from Thursday to impose stiff tariffs on imports of steel and aluminum, which has investors worried about escalating retaliation by other countries and higher inflation. He said that the United States is losing on trade with virtually every country and that "trade wars are good" and "easy to win."
Investors have a different impression. Markets tumbled in Asia, where China expressed "grave concern," and spread to Europe, where the president of the European Union's governing body promised retaliation if Trump follows through. When markets opened in the U.S., the Dow Jones industrials and S&P 500 were sharply lower, following steep declines Thursday.
A trade war would hurt the global economy, which has only recently gotten in sync, with economies around the world rising together. And U.S. companies are heavily reliant on global trade, which means investors in U.S. stocks have only recently begun feeling the full benefit.
Companies in the S&P 500 got 43 percent of their sales from outside the United States in 2016, according to the most recent data from S&P Dow Jones Indices. That means Apple and other big U.S. companies are dependent on customers not only in Peoria but also Paris and Peru.
KEEPING SCORE: The S&P 500 was down 24, or 0.9 percent, to 2,653, shortly after 10 a.m. Eastern time. If it ends up falling 1 percent, it would be the fourth straight day where the index has dropped by that amount. The index had a total of four such days in all of last year.
The S&P 500 is on pace for a loss of 3.5 percent this week, which would be its third decline that severe in the last five weeks. The worst weekly loss of last year was 1.4 percent.
The Dow Jones industrial average fell 372, or 1.5 percent, to 24,238, and the Nasdaq composite dropped 74, or 1 percent, to 7,106.
RATE FEARS: Worries about the possibility of higher inflation and interest rates have meant big swings for markets since February, as investors try to figure out whether
If Trump follows through on his tariff promise, it could raise costs for companies that use lots of steel, which could lead to higher inflation. Inflation has been low in the years following the Great Recession, but if it jumps higher, it could force the Federal Reserve to raise short-term rates more quickly and severely than investors are expecting. That could easily upset markets, which had been enjoying a remarkably smooth ride last year.
The yield on the 10-year Treasury rose to 2.83 percent from 2.81 percent late Thursday. The two-year yield, which moves more on expectations of Fed movements, rose to 2.23 percent from 2.22 percent. The 30-year yield, which moves more on expectations of future inflation, climbed to 3.11 percent from 3.09 percent.
MARKETS ABROAD: In Asia, Japan's Nikkei 225 plunged 2.5 percent, the Hang Seng in Hong Kong fell 1.5 percent and South Korea's Kospi dropped 1 percent.
In Europe, France's CAC 40 lost 2.1 percent, and Germany's DAX fell 2 percent. The FTSE 100 in London gave up 1.3 percent.
COMMODITIES: Benchmark U.S. crude fell 47 cents to $60.52 per barrel. Brent crude, the international standard, lost 44 cents to $63.39 per barrel.
Gold rose $18.80, or 1.4 percent, to $1,324.00 per ounce. Gold usually rises when fears about inflation are climbing.
CURRENCIES: The dollar fell to 105.32 Japanese yen from 106.24 yen late Thursday. The euro rose to $1.2326 from $1.2255, and the British pound rose to $1.3790 from $1.3768.