Dow futures fall 1,300 points, S&P 500 set to enter bear market on Trump tariff market collapse

Investors did not receive the news over the weekend they were wishing for that the Trump administration was having successful negotiations with countries to lower the rates, or at the very least, was considering delaying the set of so-called reciprocal tariffs due to take effect April 9. The initial unilateral 10% tariff went into effect Saturday.Investors were surprised first by the magnitude of certain rates applied to trading partners that appeared to be based on a formula without a valid rationale based on established economic theory. They were rattled further when China on Friday decided to retaliate first with a 34% tariff on all U.S. imports, instead of negotiating.

Trump’s Liberation Day last Wednesday triggered annihilation days on Thursday and Friday

“Trump’s Liberation Day last Wednesday triggered annihilation days on Thursday and Friday, with the stock market vigilantes giving a costly thumbs-down to Trump’s reign of tariffs,” wrote Ed Yardeni, president and chief investment strategist of Yardeni Research, in a note to clients Sunday.While the administration said at least 50 nations had reached out to start negotiations, Canada and the European Union were planning to follow China’s lead and readying retaliatory tariffs against the U.S. Vietnam has offered already to cut tariffs on the U.S. to zero, according to Trump, but they appeared to be the exception so far.“Margin calls are going out as we speak,” said Chris Rupkey chief economist at FWDBONDS. “For a third straight day investors in U.S. equity markets have turned (a) huge thumbs down on the White House Liberation Day tariffs which have rocked Wall Street.”