US stocks opened sharply lower for a second day in a row after China retaliated against US tariffs in an escalating trade war, as Wall Street analysts warned about the rising risk of a recession.

The Dow Jones Industrial Average (^DJI) sank around 2.2%, or about 1,000 points, while the S&P 500 (^GSPC) plummeted about 2.3%. The tech-heavy Nasdaq Composite (^IXIC) dropped more than 2.8% after the three major averages suffered their worst day since 2020 on Thursday.

China said it will impose additional tariffs against US-made imports in reaction to President Trump’s escalated duties revealed on Wednesday.

Trump’s reciprocal tariffs announcement sparked fears of a trade war and the risk of a recession.

“The tariffs, if they stay in place, would be a big hit to the US and global growth, likely pushing the US and global economy into recession this year,” JPMorgan’s Natasha Kaneva said in a Friday note.

Oil futures tanked more than 7% in early trading as concerns about cratering demand rose.