Wall Street trades lower as Trump threatens China with steeper tariffs, markets near bear territory

The sell-off spilled into other asset classes. Bitcoin dropped below $77,000, oil prices fell under $60 a barrel, and volatility surged.

Wall Street's main indices continued to trade firmly lower albeit off lows as investors grappled with growing fears of a prolonged trade war and a White House unwilling to blink.

Fears deepened as President Trump doubled down on his hardline trade stance, threatening even steeper tariffs on China — a move that escalated an already fraught standoff and pushed US markets closer to bear territory.

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The S&P 500 shed 0.8 percent, now down nearly 20 percent from its February peak — the threshold that typically signals a bear market. The Dow Jones Industrial Average plunged 988 points, or 2.6 percent, following two historic 1,500-point declines last week. The Nasdaq Composite fell 0.6 percent and is now 24 percent below its record high, with tech stocks once again leading losses.

Markets saw a brief bounce at the open on hopes that the White House might consider delaying the sweeping tariff hikes that went into effect over the weekend. But that optimism was short-lived. The administration dismissed talk of a 90-day pause as “fake news,” triggering a sharp reversal.

Over the weekend, Trump defended the policy, comparing it to "medicine" needed to fix systemic trade imbalances. On Monday, he issued a fresh warning to China on social media, threatening to slap a 50 percent tariff unless Beijing rolled back its retaliatory measures by April 8. Talks, he added, would be suspended if China failed to comply.

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Commerce Secretary Howard Lutnick confirmed the hardline approach, telling CBS News: “The tariffs are coming... They are going to stay in place for days and weeks.”

The sheer scale and speed of the tariff rollout has stunned investors. Rates have been applied across dozens of trade partners without the usual economic justifications. China, instead of seeking negotiations, retaliated immediately with a 34 percent levy on all US imports.

With the administration showing little appetite for compromise, Wall Street is now pricing in a long, messy trade war.

The market rout is also raising fears of forced selling, as funds scramble to raise cash to meet margin calls. The CBOE Volatility Index, or VIX, spiked to 50 on Monday — a level typically associated with extreme market stress.

The sell-off spilled into other asset classes. Bitcoin dropped below $77,000, oil prices fell under $60 a barrel, and volatility surged.

European markets slumped for a fourth straight session on Monday, caught in the global equity rout sparked by President Trump’s aggressive new tariff regime. The pan-European Stoxx 600 index dropped as much as 6 percent before trimming losses to end 4.54 percent lower. France’s CAC 40 tumbled 4.8 percent, Germany’s DAX shed 4.26 percent, and the UK’s FTSE 100 declined 4.4 percent, as fears of an escalating trade war and a prolonged downturn continued to rattle investor nerves.

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