US stocks fall again, S&P 500 enters bear territory

U.S. stocks plunged for a third straight session on Monday, as the White House doubled down on aggressive tariffs against key trading partners despite growing market turmoil. The S&P 500 sank 3.7%, pushing its decline from its February record high to 20%, officially entering bear market territory.

US stocks fall again, S&P 500 enters bear territory

The Dow Jones dropped another 1,200 points, or 3.3%, while the Nasdaq fell 3.7%, having already entered a bear market last week amid mounting recession fears sparked by President Trump’s sweeping trade policies. This marked a continuation of the market’s negative momentum as investor sentiment soured in response to the escalating trade tensions and uncertainty surrounding global growth prospects. On Friday, China announced a 34% tariff on all U.S. imports instead of returning to the negotiating table, further intensifying the trade war and reinforcing concerns about the long-term impact on global trade flows. Trump, in turn, reaffirmed that he would not ease tariffs until the U.S. trade deficit with China is resolved, signaling that the conflict is far from over. The ongoing dispute has led to a sharp sell-off in equities, with investors fearing that prolonged tariffs and retaliatory measures will significantly disrupt global supply chains and strain economic growth.

Other major trading partners prepare retaliatory measures

Meanwhile, reports suggest that other major trading partners, including Canada and the European Union, are preparing similar retaliatory measures, heightening fears of a full-blown trade war that could engulf multiple economies. As the trade war intensifies, markets are becoming increasingly jittery, and investor confidence continues to wane. The uncertainty over future trade policies and their potential impact on corporate profits is leading to increased volatility, with traders increasingly risk-averse. Adding to the unease, major financial firms, including Goldman Sachs, have issued warnings about the economic fallout from the escalating trade war. They cautioned that the prolonged conflict significantly raises the risk of a U.S. recession, as tariffs could raise costs for consumers and businesses, disrupt international supply chains, and reduce global demand. These fears have exacerbated the downward pressure on stocks, as investors worry that slowing economic activity, both domestically and internationally, could erode corporate earnings and lead to widespread job losses.

Eyes on trade war developments

As the market reacts to these mounting risks, traders will be closely monitoring any further developments in the trade dispute, particularly President Trump’s next steps and the potential for additional tariffs or retaliatory actions from other countries. With recession fears on the rise and trade tensions showing no signs of easing, the outlook for U.S. stocks remains uncertain, and investors are likely to remain on edge as they navigate this turbulent economic environment. The market’s response to future policy announcements and developments in the global trade landscape will be critical in determining whether the recent bear market is a temporary correction or the beginning of a more prolonged downturn.