U.S. stock futures fell sharply early Monday, signaling another difficult trading session ahead, following a historic two-day market sell-off that followed President Donald Trump’s controversial rollout of high tariff rates on key U.S. trading partners.
The Dow Jones Industrial Average futures dropped by 1,033 points, or 2.68%, while S&P 500 futures declined by 3.34%, and Nasdaq-100 futures lost 4.26%. The steep losses reflect ongoing investor anxiety, with many continuing to liquidate tech stocks to raise cash.
The latest market plunge follows a record-breaking wipeout at the end of last week. The Dow posted its first-ever back-to-back losses exceeding 1,500 points, including a staggering 2,231-point drop on Friday. The S&P 500 plunged 6% on Friday, marking its worst performance since the pandemic’s onset in March 2020. In just two days, the index lost 10%, pushing it more than 17% below its February peak, nearing a 20% decline that signals a bear market. The Nasdaq Composite also entered bear market territory, falling 22% from its record, following consecutive losses of nearly 6% on Thursday and Friday.
Investors were hoping for positive news over the weekend, expecting either a breakthrough in negotiations to lower the new tariff rates or a delay in the imposition of reciprocal tariffs, set to take effect on April 9. However, no such relief came. Instead, the Trump administration downplayed the market sell-off.
On Sunday, President Trump defended his approach, stating, “I don’t want anything to go down, but sometimes you have to take medicine to fix something,” referring to the economic impact of his tariff policies. He reiterated his stance on the trade deficit with China, saying, “Unless we solve that problem, I’m not going to make a deal.”
Commerce Secretary Howard Lutnick confirmed that the tariffs would not be postponed, while Treasury Secretary Scott Bessent indicated that negotiations with over 50 countries were ongoing but stressed the difficulty of resolving the issue quickly.
Markets were shaken by the unexpectedly high tariffs imposed on U.S. trading partners, which appeared to lack a solid economic rationale. The situation escalated when China retaliated on Friday with a 34% tariff on all U.S. imports, opting for a direct response rather than pursuing negotiations.
Ed Yardeni, president of Yardeni Research, noted that Trump’s “Liberation Day” tariff announcement sparked massive market losses, with investors reacting negatively to the administration’s approach. Meanwhile, other countries, including Canada and the European Union, prepared to follow China’s lead with their own retaliatory tariffs. However, Vietnam offered to cut tariffs on U.S. imports to zero, which Trump acknowledged as a rare exception.
As fears of a market collapse spread, Wall Street’s volatility index (VIX), a key gauge of investor anxiety, surged to an extreme 45 level on Friday, typically associated with bear markets.
Chris Rupkey, chief economist at FWDBONDS, commented, “For a third straight day, investors in U.S. equity markets have given a huge thumbs down on the White House’s ‘Liberation Day’ tariffs, which have rocked Wall Street.”
Meanwhile, the price of Bitcoin, traditionally seen as a tech asset, also dropped below $80,000 on Sunday, further indicating that investors were pulling out of riskier assets. Global markets mirrored the turmoil, with Japan’s Nikkei 225 plunging 8% as trading began in Asia.
