Stocks in the U.S. look poised for another bruising day, with futures on leading indexes pointing south and following a wave of selling overseas amid mounting investor fears over the economic fallout from the Trump administration’s barrage of tariffs.
Two hours before markets opened in New York, futures on the S&P 500 were down 92 points, or 1.8%. Dow Jones Industrial Average futures, which had fallen roughly 1,250 points in earlier trading on Monday, pared those losses and were down 900 points, or 2.3%, while Nasdaq Composite futures were off 2.1%.
In Asia, Tokyo’s Nikkei 225 index tumbled 7.8%. Hong Kong’s Hang Seng plunged 13.2% — its steepest drop since the 1997 Asian financial crisis — and the Shanghai Composite index lost 7.3%. In Taiwan, the Taiex fell 9.7%, its heaviest loss on record. South Korea’s Kospi dropped 5.6%, while Australia’s S&P/ASX 200 declined 4.2%.
European shares followed Asian markets downhill. Germany’s DAX index was down 5.8% in morning trade. Paris’ CAC 40 also shed 5.8%, and Britain’s FTSE 100 lost 4.9%.
“Game of chicken”
Stock markets around the world sold off last week after President Trump on April 2 announced a minimum 10% tariff on all U.S. imports and “reciprocal” levies on nearly 90 countries. The global tariff took effect on Saturday, while the matching tariffs are set to hit on April 9.
The scale of the tariffs has surprised investors, sending U.S. stocks into their sharpest decline in five years and wiping out trillions in investor wealth. Many economists warn that imposing broad tariffs on goods shipped into the U.S. could drive up inflation, chill spending by consumers and hurt economic growth.
Retaliating against the U.S., China said Friday it will place a 34% tariff on imports of all U.S. products starting April 10. Beijing in March also started charging a 15% tax on American farm products, including chicken, pork and soy beans.
“China and the U.S. are now locked in a game of chicken, with the risk of a severe global trade war looming over financial markets,” analysts with Pantheon Macroeconomics told investors in a note.
The S&P 500 has declined nearly 14% since Mr. Trump unveiled the latest tariffs last week, while the blue-chip Dow is down 12%. The Nasdaq has decreased nearly 16% over that period, putting the tech-heavy index in a bear market — when stocks fall at least 20% from their most recent high.
Highest tariffs since 1909
Since re-entering the White House in January, Mr. Trump has also slapped 25% tariffs on imports from Canada and Mexico, sharply raised import duties on Chinese goods, and put 25% levies on foreign cars, among other measures aimed at U.S. trading partners.
The average U.S. tariff rate on imported goods is now at its highest level since 1909, according to the Yale Budget Lab.
Mr. Trump said Sunday that he won’t retreat from his tariffs unless other nations even out their trade with the U.S.
Speaking to reporters aboard Air Force One late Sunday, the president said he didn’t want global markets to fall but that “sometimes you have to take medicine to fix something.”
Senior Trump administration officials have staunchly defended their trade policies, saying on Sunday that more than 50 countries subject to the latest round of tariffs have requested talks.
Speaking on “Face the Nation” on Sunday, Commerce Secretary Howard Lutnick said the tariffs are “definitely going to stay in place for days and weeks. The president needs to reset global trade.”
Commerce Secretary Howard Lutnick says new tariffs here to stay 11:55
Despite last week’s market rout, some Wall Street economists expect the Trump administration to ease tariffs on certain countries in the months ahead in return for their lowering trade barriers. That would likely help shore up stocks.
“Our assumption is that, over the next few months Trump will make ‘deals’ with many countries, although China may be the exception,” Paul Ashworth, chief North America economist with Capital Economics, said in a research note. “Once it becomes clear that he is willing to accept relatively minor concessions in exchange for scaling back those tariffs, equities should rebound.”
The risk, analysts warn, is that Mr. Trump instead rolls out additional tariffs or seeks to punish trading partners that deploy their own countermeasures.
The Associated Press and AFP contributed to this report.
Alain SherterAlain Sherter is a senior managing editor with CBS News. He covers business, economics, money and workplace issues for CBS MoneyWatch.
