A measure of stocks across the globe was on track to post its largest weekly loss of the year today.
US stocks fell at the open,weighed by tariff-sensitive technology stocks following a sharp escalation in US-China trade tensions.
Tepid domestic jobs growth in July reinforced fears of an economic slowdown.
European stocks posted their biggest drop of 2019 after US President Donald Trump fired his latest trade war salvo at China.
Stock markets in Frankfurt and Paris closed over 3% lower. Dublin's ISEQ dropped below the 6,000 mark.
Investors ditched stocks and turned to safe-haven assets.
German bond yields hit record lows with the interest rate on 30 year debt turning negative for the first time ever.
The yield on the benchmark German 10-year note fell below -0.5% for the first time. The 30-year bond yield briefly dropped more than eight basis points to hit -0.006%.
That left the entire German yield curve in negative territory for the first time.
Trump vowed to impose a 10% tariff on $300 billion of Chinese imports from September 1st, escalating a bruising and protracted trade war between the world's two biggest economies.
China said on Friday it would have to take counter measures.
The abrupt end to a truce in the trade spat capped a critical week for global markets after the Federal Reserve delivered a widely anticipated interest rate cut but played down expectations of many more rate cuts ahead.
Markets around the globe dived into a sea of red, with the pan-European Stoxx dropping 2% in its sharpest daily tumble of 2019.
Trump's announcement, which came a day after US and Chinese negotiators concluded a meeting in Shanghai without much progress, marks an end to a trade truce struck in June and could further disrupt global supply chains.
The proposed levies triggered a stampede for safe-haven assets.
Core euro zone bond yields tumbled, with German 10-year government bond yields dropping more than three basis points to an all-time low of -0.529%.
That tracked the drop in 10-year US Treasuries yields to 1.832% -the lowest since November 8th, 2016, the day Trump was elected president.
Trump's move may force the Federal Reserve to cut interest rates again to protect the US economy from trade-policy risks after its first rate cut in more than a decade on Wednesday.
The new tariffs would hit a wide swathe of consumer goods from cell phones and laptop computers to toys and footwear, at a time when the manufacturing sector is already reeling from the cumulative impact of the trade war.
In currency markets, the safe-haven Japanese yen surged to a five-week high against the dollar and soared to a two and a half year peak against the pound.
The U.S. dollar softened a touch against a basket of currencies.
The British pound held near a 30-month low versus the dollar as the ruling Conservatives' majority in parliament was reduced to one seat, adding to concern over politics three months before the country is due to leave the European Union.