Wall Street was bracing for another day of steep losses on Monday, as markets were rocked by news that the Trump administration would continue to implement sweeping U.S. tariffs despite growing concerns over their potential to trigger a global recession. U.S. stock-index futures saw sharp declines in early trading on Sunday, with futures tracking the blue-chip S&P 500 down 4.3 percent, and those for the tech-heavy Nasdaq 100 plummeting by 5 percent.
These losses follow a tumultuous week for the stock market, which saw over $5 trillion wiped out from the S&P 500, marking its worst performance since the onset of the COVID-19 pandemic in 2020. The sharp declines came after President Donald Trump’s administration signaled it would press on with its controversial tariffs on U.S. imports, a move that has raised alarms over the long-term economic implications for both the United States and global trade. The Financial Times reported that investors are increasingly worried about the impact of these tariffs on the global economy.
In a retaliatory move, China imposed new duties on U.S. imports, including a hefty 34 percent tariff, further escalating tensions between the two economic giants.
During the weekend, Treasury Secretary Scott Bessent dismissed concerns over the short-term market reaction to the president’s tariffs. Speaking to NBC, Bessent maintained that the White House would “hold the course.” He stated, “Our trading partners have taken advantage of us,” adding that whether the tariffs were negotiable would depend on what other countries offered.
His comments came after Federal Reserve Chair Jay Powell warned that the tariffs would stoke “higher inflation and slower growth.” JPMorgan economists also revised their forecasts, now predicting that the U.S. economy could contract by 0.3 percent this year, down from an earlier growth forecast of 1.3 percent.
The latest market rout saw banks and technology stocks among the hardest hit, with the U.S. dollar sinking against other major currencies, and Treasury yields—typically a safe haven in volatile times—falling as investors fled to lower-risk assets. European and Asian equity markets also suffered steep declines, while commodities like copper and oil fell sharply amid fears of a global trade war.
According to data from Morgan Stanley, Friday marked the fifth-largest session of “active net reductions” by investors since 2010, with equity long-short funds responsible for 80 percent of the net selling. The Financial Times also highlighted the magnitude of the market’s downturn, noting that the S&P 500’s more than 10 percent decline over Thursday and Friday was only the fourth time in the past 85 years that the index had dropped so sharply in such a short period.
Some investors are bracing for further losses unless President Trump signals a reduction in the aggressiveness of his tariff policies. “Uncertainty is the big word right now, and we’re not even at peak policy uncertainty yet,” said Dec Mullarkey, managing director at SLC Management, speaking to the Financial Times.
As markets continue to react to the evolving trade tensions, many are watching closely to see whether the White House will reconsider its stance on tariffs or risk a deeper economic downturn.
