When stocks were getting bombarded with bad news on trade, tech privacy lapses and interest rate fears, Wall Street was holding out hope the US market could defend a key line of defense that had been in place for 442 trading days.
Stocks were trading lower in pre-market Friday on news that President Trump has asked USA trade officials "to consider" an additional $100 billion in tariffs against China imports, on top of the $50 billion previously announced.
"As long as the trade spat continues, markets are going to be jittery", said Charlie Ripley, senior investment strategist for Allianz Investment Management.
All 30 companies on the Dow lost ground on Friday. Caterpillar and Boeing, industrial giants that rely on China, led the index's losses.
Trump late Thursday threatened to slap US$100 billion (RM400 billion) more in tariffs on Chinese imports, while Beijing said it was fully prepared to respond with a "fierce counter strike".
The moves follow USA tariffs that were imposed earlier this year on Chinese steel and aluminum.
When asked about the tensions over trade now brewing with China, Trump said the US had already lost. "The tariff threats, even if only intended as bargaining tools, will be hard to back down from if talks fail to deliver results", Capital Economics' Julian Evans-Pritchard wrote in a research note Friday.
"Perhaps it is part of the negotiating process but it is not a fun part to watch and it causes uncertainty", said Art Hogan, chief market strategist at Wunderlich Securities.
It had worked up until Friday.
USA stocks were in the red throughout the session but losses deepened in the afternoon following an interview with Treasury Secretary Steven Mnuchin and a speech by Federal Reserve Chairman Jerome Powell.
Kudlow again sought to downplay investors' concerns Friday. U.S. Treasury Secretary Steve Mnuchin said on CNBC that there's the "potential of a trade war" with China, but "our objective is still not to be in a trade war". "Nothing's happened, nothing has been executed".
He and others said investors also appeared to be reducing risk ahead of the weekend.
"Investors may be thinking that Kudlow's recommendations carry no weight with the president", Stovall said. But we're going to have a much stronger country when we're finished.
Wages grew 2.7% in March compared with a year earlier, in line with expectations.
The Fed is on track to raise rates three times this year, but it could speed up the increases to keep the economy from overheating.
The combination of the hiring slowdowns and modest wage growth temporarily eased Wall Street's concerns that the economy was getting too hot. "Now we only have one issue to deal with, and that's trade".