Investors are bracing for another brutal week as trading partners respond to President Donald Trump’s economically devastating new universal tariffs.
S&P futures point to a loss of about 5 percent when Wall Street starts trading Monday, Bloomberg reported. That’s on top of 10.5 percent it already fell on Thursday and Friday, after Trump announced Wednesday afternoon that he was imposing sweeping import taxes on foreign products.
Markets in Europe and Asia saw similar losses, with the pan-European Stoxx 600 tumbling more than 6 percent Monday. Asia’s index posted its worst losses since 2008, according to Bloomberg.
The forecast has sparked talk of a potential circuit breaker, when trading is temporarily halted in the midst of rapid losses to give investors time to cool off and avoid a market crash.
If the S&P falls between 7 and 20 percent within a single day, a 15-minute break is triggered. If it falls 20 percent or more, trading is suspended for the rest of the day.
On Friday, China said it would respond in kind with 34 percent tariffs on American products set to take effect Wednesday, fueling fears for a global recession.
In just two days, U.S. markets lost $5 trillion in value. By close Friday, the S&P was down 17 percent from its all-time high on Feb. 19, putting it just 3 percentage points away from a bear market, according to Reuters.
Trump’s import tariffs—which are paid by American companies, with the costs typically passed along to consumers—range from 10 percent to a staggering 49 percent depending on the country of origin.
During his announcement, Trump labeled the new duties “reciprocal” tariffs, but in fact economists later discovered the rates were calculated based on manufacturing trade deficits with each country.
Over the weekend, some of Trump’s own supporters begged him to back off the looming trade war, but the president—who spent the weekend golfing on the taxpayer’s dime—has only doubled down.
On Sunday, he told reporters to “forget markets for a second” and said he wouldn’t cut the tariff rates unless countries negotiate to end trade deficits.
“Sometimes you have to take medicine to fix something,” he said aboard Air Force One.
Later that night, he wrote in a Truth Social post, “We have massive Financial Deficits with China, the European Union, and many others. The only way this problem can be cured is with TARIFFS, which are now bringing Tens of Billions of Dollars into the U.S.A. They are already in effect, and a beautiful thing to behold.”
Members of his Cabinet—including Treasury Secretary Scott Bessent—also tried to put a positive spin on the tariff chaos, saying there was “no reason” to anticipate a recession, Bloomberg reported.
In fact, analysts at JPMorgan now say there’s a 60 percent chance of global recession this year—up from a 40 percent chance the day the tariffs were announced, the Wall Street Journal reported.
Investors told Reuters it was probably “inevitable” that the market would have at least one up day this week, but that any rally was not likely to be sustainable.
“The bull market is dead,” Mark Malek, chief investment officer at Siebert Financial, told the news agency.
