Associated Press

Global stocks and oil plunged and gold surged on Friday after China announced it would slap tariffs on $75 billion worth of US goods.

The tariff schedule matches the US timeline, with some duties taking effect on September 1 and the remainder on December 15.

Stocks rose earlier on Friday as traders hoped for Fed Chair Jerome Powell to signal a rate cut in September.

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Global stocks and oil plunged on Friday while gold surged after China retaliated against upcoming US tariffs by announcing duties on $75 billion worth of US goods.

China's tariff schedule matches the US timeline, with some duties taking effect on September 1 and the remainder on December 15. The second tranche includes a 25% tariff on US auto imports.

"China is back with vengeance and today's action has taken the ongoing trade war between the two countries into another territory," Naeem Aslam, chief market analyst at TF Global Markets UK, said in research note.

"The biggest fear for markets now is the counter reaction from Donald Trump, who has been giving the wrong signal to markets that the trade war issue isn't a problem."

News of the tariffs hammered oil prices and sent gold higher as investors derisked their portfolios.

"We have seen the biggest drop in the oil market as traders know that this trade war is going to impact the global grow," Aslam said. "Safe haven trade is back in town with gold price surging."

"In terms of equity markets, the only trade is to sell and get out of it," he added.

Here's the market roundup as of 11:20 a.m. EST:

US stocks are tanking. The Dow Jones Industrial Average and S&P 500 slumped 1.4%, while the Nasdaq dropped 1.6%.

European equities have dropped with Germany's DAX and the Euro Stoxx 50 down 0.8%, and Britain's FTSE 100 down 0.2%.

Asian indexes closed higher with China's Shanghai Composite and Hong Kong's Hang Seng up 0.5%, while Japan's Nikkei rose 0.4%.

Oil prices have plunged with West Texas Intermediate crude down 2.8% at about $53.80 a barrel, and Brent crude down 1.8% at $58.80.

Gold has rallied 1.8% to $1,534.

Stocks rose earlier on Friday as traders wagered Federal Reserve Chair Jerome Powell will confirm an expected cut to interest rates in September during his speech in Jackson Hole, Wyoming today.

"To say that the stakes are high for the meeting is an understatement," Jasper Lawler, head of research at London Capital Group, said in a morning note. "Powell will take to the stage less than a month after the Fed's first interest rate cut in a decade and amid market expectations of another cut next month."

Markets are pricing in about a 94% chance of a rate cut in September, Lawler said. A surprise contraction in domestic manufacturing activity this month, according to IHS Markit data released this week, has fueled hopes of central bank action.

President Donald Trump is also pressuring Powell and the Fed to take more aggressive action, and has called for a cut of 100 basis points.

However, employment and retail sales data have remained strong, pointing to a robust US economy. Three of the Fed's policymakers – Esther George, Patrick Harker, and Eric Rosengren —are also opposed to further rate cuts.

"Unless the hard economic data suggest a steep decline in the US economy's trajectory, then policymakers need not embark on a major easing cycle," Han Tan, market analyst at FXTM, said in a morning note. "Instead, they can be contented with just some 'insurance' rate cuts."

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