Investors rattled by President Donald Trump's latest escalation in his trade war with China drove another round of selling on Wall Street Friday.

The latest losses marked the fifth straight drop for the S&P 500 and the worst week of the year for the market just seven days after the benchmark index hit an all-time high.

The selling picked up a day after Trump shocked markets by promising 10% tariffs on all the Chinese imports that haven't already been hit with tariffs of 25%. China struck back Friday, saying it will take "necessary countermeasures" if Trump follows through on the new tariffs, which would kick in next month.

The re-escalation in tensions between the world's largest economies has raised worries about a global recession. Investors have responded by selling stocks and buying gold and government bonds. The heightened tensions have also raised Wall Street's expectations that the Federal Reserve will be forced to cut interest rates several times to cushion the trade war's blow.

"The threat of additional tariffs on China and the lack of any progress in the trade negotiations again have made investors more worried that the disruptions which have led the Fed to need to cut rates might in fact escalate faster than the positive impact of rate cuts," said Kate Warne, chief investment strategist at Edward Jones.

The S&P 500 fell 21.51 points, or 0.7%, to 2,932.05. The Dow Jones Industrial Average dropped 98.41 points, or 0.4%, to 26,485.01. The average had briefly fallen by 334 points.

The Nasdaq composite, which is heavily weighted with technology stocks, lost 107.05 points, or 1.3%, to 8,004.07. Smaller company stocks also fell sharply. The Russell 2000 index gave up 17.11 points, or 1.1%, to 1,533.66.

Despite the weekly loss, the major indexes are all up solidly this year, led by the Nasdaq's 20.6% gain. The S&P 500 is up nearly 17%.

Technology companies accounted for much of Friday's sell-off, which lost some strength toward the end of the day. Communications services, consumer discretionary and energy stocks also bore a big share of the losses. Investors shifted money into bonds and stocks traditionally seen as less risky: real estate and utilities.

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