Bloodbath on Wall Street: S&P500 enters bear market, Dow Jones down 1,300 pts amid trade war fears

Investors had hoped the weekend would bring some signs of moderation or talks following President Trump’s abrupt imposition of 10 percent tariffs on nearly all key U.S. trade partners

U.S. stocks plunged for a third straight session on Monday, with investors reeling from the fallout of the Trump administration’s aggressive tariff measures that have triggered a global market rout and fears of a deepening trade war.

Coming off a brutal week, Monday’s losses added to the wreckage across equity markets. The Dow has now shed more than 1,200 points to trade 3 percent lower for three straight sessions— a historic first — including a staggering 2,231-point tumble on Friday. The S&P 500 lost 6 percent on the last day of the previous week, its sharpest single-day decline since the COVID crash in March 2020, wiping out 10 percent in just two sessions. Meanwhile, the tech-heavy Nasdaq has officially entered bear market territory, now down over 22 percent from its all-time high.

Investors had hoped the weekend would bring some signs of moderation or talks following President Trump’s abrupt imposition of 10 percent tariffs on nearly all key U.S. trade partners, which kicked in on Saturday. Instead, the White House struck a combative tone.

"I don’t want anything to go down, but sometimes you have to take medicine to fix something," Trump said in a Sunday evening statement. "We’re losing hundreds of billions of dollars a year to China. Until we fix that, there won’t be a deal."

Commerce Secretary Howard Lutnick reaffirmed the administration’s firm stance, stating that the tariffs were "definitely going to stay in place for days and weeks," quashing any hopes of a near-term reversal. Treasury Secretary Scott Bessent echoed the message, adding that while over 50 countries have approached the U.S. for talks, resolving the issue won’t be quick.

Canada and the European Union are reportedly preparing countermeasures as well, signalling a broadening of the standoff.

Wall Street now fears the selloff could spiral further, as hedge funds and institutional investors are forced to liquidate positions to meet mounting margin calls. The CBOE Volatility Index — Wall Street’s so-called fear gauge — shot up to 50 early Monday, a level rarely seen outside of major bear markets.

The ripple effects were felt far beyond U.S. shores. Bitcoin crashed below $77,000, oil prices tumbled under $60 per barrel to multi-year lows, and the Hang Seng in Hong Kong nosedived 13 percent in its steepest drop since 1997. Germany’s DAX also sank, falling as much as 10 percent during Monday’s session.

Among the hardest-hit U.S. stocks were high-profile names like Tesla, down 6 percent in early trade, along with Caterpillar — a global construction bellwether — which shed 5 percent. Apple also saw a sharp 4 percent drop.

If the S&P 500 closes down 4 percent or more on Monday, it would mark the third consecutive day of such a steep decline — something that hasn’t happened since the depths of the Great Depression in 1933.

With the administration showing no signs of backing down and retaliatory measures mounting, traders are bracing for more pain in the days ahead — unless diplomacy steps in to cool things off.

As for Indian markets, Dalal Street went into a freefall on April 7, as panic-selling took the benchmark indices sharply lower. Triggered by Donald Trump’s tariff tantrum on Wall Street, a wave of global jitters wiped out a jaw-dropping Rs 16 lakh crore in market value — the sharpest intraday collapse since June 2024. Inflation fears, a looming consumption crunch, and recession fears had investors running for cover as the Nifty and Sensex plunged deep into the red.

India VIX — the fear gauge of the domestic market — soared as much as 66 percent to 22.85 on April 7, marking its sharpest intraday spike since June 4, 2024, according to Bloomberg data. The dramatic surge has completely erased the downtrend that had been in place since the latter half of January this year.