US stocks are poised to continue their scorching free fall as futures signaled more fear over President Donald Trump’s tariffs. Administration officials and Trump himself signaled on Sunday that they won’t back down from their aggressive stance. Meanwhile, an inflation report is due later this week as well as bank earnings.
Wall Street remained in fear mode over President Donald Trump’s tariffs on Sunday evening as futures pointed to more steep losses.
Dow Jones Industrial Average futures tumbled 1,302 points, or 3.3%, while S&P 500 futures sank 3.9% and Nasdaq futures dived 4.9%. That follows a devastating week that saw the worst selloff since the early days of the COVID-19 pandemic.
The 10-year Treasury yield dropped 8.5 basis points to 3.906%, and US crude oil prices fell 3.7% to $59.72 a barrel.
On Wednesday, Trump announced a minimum tariff rate of 10% and higher rates for 57 economies like China (34%), the European Union (20%), and Japan (24%). Fitch Ratings estimated that the effective tariff rate could hit 25% on average — the highest in more than 115 years.
Former Treasury Secretary Larry Summers aired caution in an X post on Sunday, saying there’s a very good chance of more market turbulence similar to what was seen on Thursday and Friday.
Those sessions represented the fourth largest two-day drop in the last 85 years, Summer said. The selloff wiped out about $6 trillion in market cap.
“A drop of this magnitude signals that there’s likely to be trouble ahead, and people ought to be very cautious,” Summers wrote.
Meanwhile, Trump administration and the president himself defended the tariffs.
“I don’t want anything to go down, but sometimes you have to take medicine to fix something,” Trump told reporters when asked about the market rout.
He pointed to the US trade deficit with China and said he’s willing to make a deal, “but they have to solve their surplus.”
Earlier, National Economic Council Director Kevin Hassett told ABC News that more than 50 countries have reached out to the White House to negotiate on tariffs.
But for now, Commerce Secretary Howard Lutnick said the tariffs will remain and won’t be postponed. While the minimum 10% tariff took effect early Saturday, the individualized levies will go into place Wednesday.
“They are definitely going to stay in place for days and weeks,” he told CBS.
In response to Trump’s sweeping tariffs, JPMorgan now sees a recession, with GDP shrinking 0.3% this year. But Treasury Secretary Scott Bessent said Sunday there doesn’t have to be a recession and called the stock selloff a short-term reaction.
“One thing that I can tell you, as the Treasury secretary, what I’ve been very impressed with is the market infrastructure, that we had record volume on Friday. And everything is working very smoothly so the American people, they can take great comfort in that,” he told NBC.
Bessent also gave no indication that Trump will back off from this aggressive tariffs.
On Friday, Federal Reserve Chairman Jerome Powell warned that sweeping tariffs could push inflation higher, cooling anticipation for an imminent interest rate cut.
Markets will get an inflation update on Thursday, when the consumer price index report for March will come out, giving insight into where inflation was headed before the latest tariffs hit.
Additionally, earnings season for first-quarter results will kick off this week as JPMorgan, Wells Fargo, and BlackRock report on Friday.
Commentary from top executives about the tariffs and their forecasts for how they will affect their companies will be under special scrutiny.
This story was originally featured on Fortune.com
