The stock market was crushed Friday as the bears ran rampant after China responded to President Donald Trump's tariffs. Now, a fresh inflation report and a new earnings season are on the way.

Sellers hammered the Nasdaq composite 5.8% lower Friday. It closed in bear market territory after falling more than 20% below its Dec. 16 high of 20,204.58. The tech-heavy index now sits more than 16% below its falling 50-day moving average. It suffered a weekly drop of 10% and is now down 19.3% for the year so far.

The S&P 500 plunged 6% Friday and fell 9.1% for the week. The benchmark index now sits nearly 12% below its 200-day moving average and suffered a sixth weekly decline in seven. It sits more than 17% below February's all-time high of 6,147.43 and is down 13.7% so far this year.

Decliners outnumbered advancers around 10-to-1 on the New York Stock Exchange and by more than 5-to-1 on the Nasdaq. Volume was higher on both exchanges.

The Dow Jones Industrial Average cratered 2,231 points, or 5.5%. Recent strength evaporated over the past two sessions, causing it to record its biggest weekly point and percentage decline since March 2020. It is now in correction territory. Nike (NKE) was the only component to post a gain while Boeing (BA) and 3M (MMM) lagged with drops of 9.5% and 9.2%, respectively.

Less Bad, But Still Bad For Small Caps

Small caps fell less than the broader market, with the Russell 2000 skidding 4.4% Friday. However, the index sits 17% below its 200-day moving average. Growth stocks were smashed, with the Innovator IBD 50 (FFTY) exchange traded fund diving 7.6%. It sits nearly 29% below its Feb. 18 high of 34.26.

The 10-year Treasury yield fell 5 basis points to 4%, sharply lower than last week's level of 4.26%. This underlines the broad flight to safety. The VIX, Wall Street's fear gauge, rocketed 50.1% higher, further underscoring the bearish sentiment.

Investor's Business Daily continues to recommend exposure at the 0% to 20% level. Given recent steep declines it makes sense to be at the lower end of this scale. Further, due to the depth of recent declines there is a chance of a snapback. But investors should wait for a follow-through day before making new buys. Jumping in too soon could lead to painful losses.

China Tariff Response Sparks Rout

Sentiment took another beating after China said it plans to impose a 34% tariff on all imported goods from the U.S. This mirrors the levy imposed by Trump when he announced his tariff agenda late Wednesday.

The administration's sweeping moves have cast a chill over global markets, hitting allies and foes alike. Federal Reserve Chairman Jerome Powell said Friday that the tariffs would cause "higher inflation and slower growth."

In addition, the Labor Department said nonfarm payrolls grew 228,000 in March, above analyst expectations for 130,000, according to Econoday. The unemployment rate ticked higher to 4.2%.

There is some noteworthy economic data due in the coming week. The consumer credit reading for February is expected Monday while both wholesale inventories data and the minutes for the Fed's March Federal Open Market Committee meeting both are scheduled for Wednesday. More inflation data also is on the way, with March's consumer price index due Thursday and the producer price index dropping the next day.

A new earnings season is set to kick off in the coming week. Major banking names JPMorgan Chase (JPM), Morgan Stanley (MS) and Wells Fargo (WFC), as well as asset manager BlackRock (BLK) all plan to post results.

Warren Buffett Play, These Stock Market Groups Walloped

All S&P 500 sectors ended Friday lower. Energy, financials and industrials took the hardest blows while health care and real estate held up the best.

A more specific view of the damage on the stock market came into focus by studying the relative performance of the IBD's 197 industry groups.

Oil-and-gas groups took a thrashing, with drillers, explorers and producers hit particularly hard. Data storage plays, life insurance stocks and automakers were also rocked.

While not strictly an insurance stock, Berkshire Hathaway (BRKB), which owns Geico, ended the session down 6.8% and below its 50-day moving average. It reflects how pockets of strength — which includes gold, REITs and China stocks — were also capitulating.

Some areas managed to squeeze out gains, though. Homebuilders rallied on lower interest rates while office supply retailers, shoe stocks and clothing makers were among the better performers.

One final point underlining the damage done to investors — the so-called Magnificent Seven have been crushed. The Roundhill Magnificent Seven ETF (MAGS) is now down 24% for the year.