S&P 500: Market Sentiment Stretched as Bounce Talk Builds After Brutal Week

Tariff Fallout Slams Wall Street as Bear Market Fears Escalate

Traders returned from the weekend to find no relief from the White House’s aggressive tariff push, triggering another wave of selling across global markets. Hopes for a de-escalation faded after President Trump and senior officials doubled down on new levies that took effect Saturday, rattling already fragile sentiment. China retaliated swiftly with a 34% tariff on all U.S. imports, while Canada and the EU prepared similar responses.

The lack of any diplomatic breakthrough sparked a sharp move lower in premarket trade. Dow futures dropped 836 points, or 2.2%, while S&P 500 futures sank 2.5%, bringing the index within range of a bear market. Nasdaq-100 futures tumbled 2.9%, with tech names again leading losses. Earlier, Dow futures had been down more than 1,500 points at session lows.

How Bad Was Last Week?

The Monday slide follows a historic collapse to close out last week. The Dow dropped over 3,700 points across Thursday and Friday, marking its worst two-day performance on record. The S&P 500 plunged 6% Friday alone, the biggest single-day decline since early 2020. The Nasdaq Composite confirmed a bear market, now off 22% from its record.

The CBOE Volatility Index spiked to 50 early Monday—its highest since the pandemic panic in 2020—as forced selling, driven by margin calls, exacerbated the pressure. “Margin calls are going out as we speak,” warned FWDBONDS chief economist Chris Rupkey.

What’s Behind the Market’s Reaction?

Traders were unnerved by the administration’s firm stance on trade. Commerce Secretary Howard Lutnick confirmed the tariffs “are definitely going to stay,” while Treasury Secretary Scott Bessent said talks with over 50 countries were underway, but warned these would take time. “This is not what we voted for,” wrote hedge fund manager Bill Ackman, urging Trump to halt further escalation.

The White House appears committed to an April 9 implementation of reciprocal tariffs, adding urgency for investors exposed to global trade.

Which Stocks Are Moving the Most?

Tesla led the downside, falling over 6% premarket as trade tensions and brand backlash weighed on sentiment. Shares are down more than 40% this year. Caterpillar slipped 5%, reflecting concerns over its global footprint. On the upside,

Dollar General was upgraded by Citi to neutral, with analysts highlighting the company’s low tariff exposure—only 10% of its goods are affected. HSBC, meanwhile, flagged a possible short-term bounce, but cautioned that “this isn’t over yet.”

What Should Traders Watch Next?

The focus now turns to the April 9 tariff deadline and whether pressure forces the administration to soften its position. Until then, traders should expect elevated volatility, especially in tech and globally exposed industrials. With the VIX spiking and liquidity tightening due to margin calls, market stress could intensify if a policy pivot doesn’t materialize.

Price levels aren’t as important as the VIX in my opinion. If it turns positive, stocks could scream to the upside.

More Information in our Economic Calendar.