The Dow sank 1%, or nearly 500 points, retreating from morning gains. The S&P 500 suffered a 1.4% loss. The Nasdaq composite was the hardest hit of the major indexes with a 1.9% drop. Small-cap stocks weren't spared the sell-off, with the Russell 2000 index diving 1.6%.

US stocks dropped lower Friday after President Donald Trump threatened to hike tariffs on imports from China, reigniting fears of a trade war that rocked global markets earlier this year.