Stock market today: Markets plunge Monday

U.S. stock futures were hit once again on Monday as the White House remained defiant after President Donald Trump’s rollout of shockingly high tariff rates on most key U.S. trading partners has sparked a historic three-day market meltdown.

S&P 500 futures shed 2.2% with the benchmark nearing bear market territory when official trading begins. It closed Friday down 17.4% from its closing record touched in February. Dow Jones Industrial average futures fell 837 points, or 2.1%. Nasdaq-100 futures lost 2.2% as investors continued to shed their one-time tech winners to raise cash.

This follows a market wipeout to end last week:

• The Dow posted back-to-back losses of more than 1,500 points for the first time ever, including a 2,231-point shellacking on Friday.
• The S&P 500 dropped 6% on Friday for its worst performance since the outbreak of the pandemic in March 2020. The benchmark lost 10% in two days.
• The Nasdaq Composite entered a bear market Friday — down 22% from its record — after losses on Thursday and Friday of nearly 6% apiece.

Trump’s initial unilateral 10% tariff went into effect Saturday. Investors were hoping for news over the weekend that the Trump administration was having successful negotiations with countries to lower the tariff rates, or at the very least, was considering delaying the set of so-called reciprocal tariffs due to take effect April 9. Instead the president and his key advisors played down the sell-off:

• Trump said Sunday evening on the market sell-off: “I don’t want anything to go down, but sometimes you have to take medicine to fix something.”
• Trump added, “We have a trillion-dollar trade deficit with China, hundreds of billions of dollars a year we lose with China. And unless we solve that problem, I’m not going to make a deal.”
• Commerce Secretary Howard Lutnick told CBS News that the tariffs would not be postponed. “The tariffs are coming… They are definitely going to stay in place for days and weeks.”
• Treasury Secretary Scott Bessent noted to NBC News that more than 50 countries have approached the administration for negotiations, but cautioned “they’ve been bad actors for a long time, and it’s not the kind of thing you can negotiate away in days or weeks.”

Investors were surprised first by the magnitude of certain rates applied to trading partners that appeared to be based on a formula without a valid rationale based on established economic theory. They were rattled further when China on Friday decided to retaliate with a 34% tariff on all U.S. imports, instead of negotiating first.

“The president is losing the confidence of business leaders around the globe…this is not what we voted for,” wrote Bill Ackman, billionaire head of Pershing Square, on X. “The President has an opportunity on Monday to call a time out and have the time to execute on fixing an unfair tariff system. Alternatively, we are heading for a self-induced, economic nuclear winter, and we should start hunkering down.”

While the administration said at least 50 nations had reached out to start negotiations, Canada and the European Union were planning to follow China’s lead and readying retaliatory tariffs against the U.S. Vietnam has offered already to cut tariffs on the U.S. to zero, according to Trump, but they appeared to be the exception so far.

Fears grew on Wall Street that the sell-off would feed on itself with hedge funds forced to sell down equities and other risky assets to raise cash needed meet margin calls. The CBOE Volatility Index, Wall Street’s fear gauge, surged to the 50 level early Monday, an extreme level seen mostly only during bear markets.

“Margin calls are going out as we speak,” said Chris Rupkey chief economist at FWDBONDS. “For a third straight day investors in U.S. equity markets have turned (a) huge thumbs down on the White House Liberation Day tariffs which have rocked Wall Street.”

The contagion spread to other assets and around the globe. The price of bitcoin, tumbled below $77,000. U.S. crude oil dropped below $60 a barrel to a multiyear low. Hong Kong’s Hang Seng Index dropped 13% for its biggest decline since 1997. Germany’s DAX Index lost as much as 10% during Monday’s session.

Tesla led the losses in premarket trading, down 6%. Caterpillar, a big seller of construction equipment around the world, fell 5% early Monday.