(Reuters) – The Dow Jones Industrial Average fell more than 450 points and the other main indexes slipped on Friday after U.S. President Donald Trump’s latest tariff threat on Chinese imports revived fears of a trade war between the two countries.

Trump on Thursday threatened to slap $100 billion more in tariffs on Chinese imports, while Beijing said it was fully prepared to respond with a “fierce counter strike”.

Fears of a trade war since Trump announced tariffs on steel and aluminum more than a month ago have kept investors on edge over concerns that such protectionist measures would hit global economic growth.

“Markets are absolutely appalled by protectionism,” said Dec Mullarkey, managing director at Sun Life Investment Management based in Wellesley, Massachusetts.

Mullarkey said the markets may tolerate some tit-for-tat, given the strong fundamentals.

“Let’s fast forward to next week, if earnings are strong then markets will take a lot of comfort and that’s the expectation.”

Mixed signals from administration officials also added to the nervousness. Trump’s top economic adviser Larry Kudlow told CNBC he learnt of the new tariffs on Thursday night. He told Bloomberg TV that negotiations had not yet started, but later said on Fox Business that talks are ongoing.

“Clearly the reaction from China to tariffs is clearly the only factor driving the markets today,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin.

At 12:54 a.m. the Dow Jones Industrial Average .DJI was down 320.42 points, or 1.31 percent, at 24,184.8. The Dow dropped 456 points at session’s low.

The S&P 500 .SPX was down 26.29 points, or 0.99 percent, at 2,636.55 and the Nasdaq Composite .IXIC was down 63.26 points, or 0.89 percent, at 7,013.29.

All 30 Dow components were in the red and each of the 11 major S&P sectors were lower, with the defensive utilities and real estate sectors falling the least.

As on Wednesday, industrials led the decliners. Boeing (BA.N), the single largest U.S. exporter to China, fell 2.5 percent. Caterpillar (CAT.N) declined 2.8 percent and Deere (DE.N) dropped about 2.3 percent.

Chipmakers, which as a group rely on China for about a quarter of their revenue, also declined. The Philadelphia semiconductor index .SOX fell 1.2 percent.

Nonfarm payrolls increased by a fewer-than-expected 103,000 last month, a Labor Department report showed. While the annual growth in average hourly earnings rose to 2.7 percent, it stayed below the 3-percent that economists estimate is needed to lift inflation toward the Federal Reserve’s 2-percent target.

“That’s not showing us wage inflation where the Fed would have to step in. This seems to be a natural improvement,” said Sean Lynch, co-head of global equity strategy, Wells Fargo Investment Institute in Omaha, Nebraska.

Declining issues outnumbered advancers by a 2.64-to-1 ratio on the NYSE and a 2.25-to-1 ratio on the Nasdaq.

The S&P index showed two new 52-week highs and one new lows, while the Nasdaq recorded 33 new highs and 37 new lows.

Source: Reuters
Image: Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., April 5, 2018. REUTERS/Brendan McDermid