U.S. stock markets took a steep dive Monday morning, with futures for the Dow Jones, S&P 500, and Nasdaq plummeting, as investors brace for the growing impact of President Trump’s aggressive new tariff plan. The sudden policy shift has shaken confidence on Wall Street and triggered global market reactions.
Futures for the S&P 500 fell by 4.9%, while the tech-focused Nasdaq 100 dropped 5.3%. Dow Jones Industrial Average futures also slid 4.3%, shedding roughly 1,600 points. Oil prices were not spared either, falling nearly 4% and dipping below $60 a barrel for the first time since 2021.
Global Market Panic
The sell-off is extending a sharp two-day decline that saw the Nasdaq Composite officially enter bear market territory last Friday. U.S. stocks lost over $5 trillion in value last week, marking the worst weekly performance since the early days of the COVID-19 pandemic in 2020.
Asian and European markets also suffered on Monday. Investors are increasingly worried that President Trump’s tariff moves, introduced over the weekend, could slow global growth and spark a full-blown trade war.
Tariffs Trigger Global Concerns
Trump’s new policy imposes a 10% baseline tariff on most U.S. trading partners. These duties became active over the weekend, and the administration plans to implement more targeted tariffs on countries labeled as “bad actors” starting Wednesday.
Despite criticism from economists and global leaders, the president doubled down Sunday night, stating, “Markets may have to take medicine.” Trump also insisted he’s not trying to crash the market, even as his administration faces mounting pressure.
China has already responded with retaliatory tariffs, and the European Union is preparing countermeasures. The global tit-for-tat trade war is threatening to spiral further, raising alarm among financial institutions and investors alike.
JPMorgan Predicts Recession
In a major development, JPMorgan Chase became the first major U.S. bank to warn of a possible recession in 2025. Economists at the bank revised their forecasts, citing the uncertainty caused by the new tariff regime. According to their report released Friday, the sudden shift in trade policy has upended earlier projections of steady economic growth.
Analysts say the stock market’s sharp drop reflects deeper concerns about long-term economic damage if trade tensions continue to rise. In particular, the tech sector has been hit hard, with major firms facing higher costs and limited access to global supply chains.
White House Defends Tariff Plan
Top officials from the Trump administration went on national television Sunday to defend the move. Treasury Secretary Scott Bessent rejected fears that the tariffs could push the U.S. into recession.
“We believe these measures are necessary,” Bessent said. “This is not about hurting the economy, but about protecting American industries.”
Kevin Hassett, Trump’s top economic adviser, said over 50 countries have reached out to start negotiations. However, he acknowledged that coordinating talks with so many nations will be complex.
Commerce Secretary Howard Lutnick added, “These tariffs are definitely going to stay in place for days and weeks,” signaling no near-term relief for investors.
Industry and Expert Reactions
While the administration remains confident, business leaders and economists have expressed concern. The U.S. Chamber of Commerce warned that the tariffs could increase costs for American consumers and businesses.
“This kind of economic shock isn’t something that markets can just absorb overnight,” said Mark Zandi, chief economist at Moody’s Analytics. “If this continues, we could be facing a prolonged downturn.”
Industries reliant on international trade, such as automotive, electronics, and agriculture, are expected to feel the pinch first. Smaller businesses with tight margins could also struggle to cope with higher import costs.
What’s Next for the Markets?
With more tariffs set to roll out this week, all eyes will be on how global markets respond. Investors are watching closely for any signs that the administration might soften its stance or begin formal negotiations.
Financial experts recommend caution in the short term, urging investors to avoid panic selling but to prepare for continued volatility.
