Stock futures slump, near bear market territory as US-China trade war deepens with fresh tariffs

China said it would impose tariffs of up to 84 percent on US goods starting Thursday—an aggressive response to the Trump administration’s 104 percent duties on Chinese imports

US stock futures tumbled sharply on Wednesday, weighed down by rising tensions in the global trade arena after China unveiled steep retaliatory tariffs on American imports.

Futures linked to the Dow Jones Industrial Average fell by 558 points, or 1.5 percent, while the S&P 500 futures dropped 1.3 percent. Nasdaq-100 futures slipped 0.9 percent.

China said it would impose tariffs of up to 84 percent on US goods starting Thursday—an aggressive response to the Trump administration’s 104 percent duties on Chinese imports, which took effect shortly after midnight.

The market reaction was swift. Shares of Apple dropped as much as 2 percent in early trading before trimming losses. Ford and General Motors were also under pressure, down over 2 percent and 1 percent respectively.

In a new development, the European Union has approved its first wave of retaliatory tariffs against the United States in response to Washington’s duties on steel and aluminium. The European Commission said the new levies will take effect from April 15, following a vote by the 27-member bloc on Wednesday. The measures, first outlined last month, target a broad range of U.S. goods.

The move marks a significant escalation in trade tensions after U.S. President Donald Trump imposed 25 percent tariffs on metal imports. In addition to the EU, more than 180 countries and territories now face similar duties, with the White House announcing a fresh round of 20 percent levies on April 2.

The tariff flare-up isn’t limited to the US and China. Canada reaffirmed on Tuesday its plan to slap 25 percent tariffs on American-made vehicles, targeting both non-USMCA-compliant models and the non-Canadian, non-Mexican components of compliant vehicles imported from the US.

Investor's nerves have been frayed this week, with Wall Street enduring a bruising four-day selloff.

On Tuesday, the S&P 500 surged more than 4 percent at one point, only to reverse course and close 1.6 percent lower. The Dow swung nearly 1,400 points during the session—up 3.9 percent at its peak, before ending down 0.8 percent. The index is now nearly 19 percent below its all-time high.

In just four sessions, the Dow has shed more than 4,500 points. The S&P 500 has declined 12 percent, while the Nasdaq Composite has plummeted over 13 percent.

The turbulence has also rocked bond markets. The yield on the 10-year Treasury jumped more than 10 basis points on Wednesday to 4.37 percent, a sharp rebound from earlier in the week when it briefly slipped below 4 percent.