Timothy A. Clary / AFP / Getty Images
U.S. stock prices fell sharply in the evening of Sunday, as the Trump administration did not show any signs of reversing its plan to impose a wide range tariffs.
Futures tied to the Dow Jones Industrial Average were recently down 2.2%, pointing to a decline of more than 800 points at Monday's open, while futures linked to the S&P 500 and Nasdaq fell 2.7% and 3.4%, respectively. Dow futures fell more than 1,600 point at one time on Sunday evening.
The major indices are coming off of their worst week in the early days of Covid’s pandemic, March 2020. Stocks plummeted on Thursday and Friday after President Trump announced his announcement of sweeping new tariffs on U.S. Trading Partners. The benchmark S&P 500 declined 10.5% over the last two days of the week, while the Dow shed nearly 4,000 points.
White House officials did not indicate over the weekend whether the president might consider reducing the tariffs. The so-called reciprocal tariffs that Trump announced on Wednesday— which include new levies of 20% on imports from the European Union, 26% on Japanese imports, and 34% on imports from China—are due to take effect on Wednesday.
The Trump administration, who has also hinted at more sector-specific duties, says that the measures are necessary to restore competitiveness and bring manufacturing jobs and manufacturing back to the U.S. However, the speed and depth of the policies announced in recent weeks—and the prospect that countries will retaliate, as China did on Friday—have heightened concerns among economists and investors that the economy could slide into a recession.
Jerome Powell, Federal Reserve Chair, said Friday that the tariffs announced by the Trump administration last week were higher and increased the risk of inflation and economic growth slowing. Powell said the Fed wants to wait for greater clarity about the impact of Trump’s policies before adjusting interest rate.
Asian stocks also tumbled to kick off their week amid fears of the consequences of a trade war, with Hong Kong's Hang Seng index down 9%, while Japan's Nikkei 225 dropped 6% and South Korea's Kospi index and Australia's S&P ASX 200 each fell more than 4%.
Bitcoin also fell sharply on Sunday, following the decline in stocks as investors shun risky assets. The digital currency traded at $78,700, down from a high of nearly $84,000 on Sunday and its lowest level since early November.
The price of crude oil also fell amid growing concerns over a slowing global economy. West Texas Intermediate futures (the U.S. benchmark crude oil) fell 2.6% to 60.40 per barrel after falling as low at $59.38. This was their lowest level since April.
This article has been updated to include the latest information about U.S. Stock Futures as well as early trading in Asian markets.
