The S&P 500 is about to enter a bear market as trading starts today. Since reaching its peak on February 19, the S&P 500 has dropped 17.4%, and it is expected to open Monday in bear market territory. The 20% fall from the S&P 500’s peak is a significant warning for investors and the overall economy.
S&P 500 is currently at 5,074.08 and is expected to trade at 4,784.84 by the end of this quarter and at 4,434.93 in one year, according to Trading Economics.
US markets are experiencing their worst losses in five years due to the Trump administration’s steep tariffs. Fears of a global trade war, rising inflation, and a potential recession have led to the market selloff.
The market disaster may not stop on Monday. US stock futures on Monday, April 7 are again down considerably after two sessions of sell-offs on April 3 and 4 erased almost $5.4 trillion in market value. S&P 500 futures fell 3.7%, Nasdaq futures lost 4.6%, and Dow futures are down more than 1,313 points.
President Trump’s massive tariff regime, which started early Saturday morning and is scheduled to impose even higher tariffs on Wednesday morning, has been rejected by the markets.
But, where is the US market headed?
Since a lot will depend on how the original source of the carnage develops, the answer might not be blowing in the wind this time.
Positive negotiations between the United States and its trading partners could halt the market disaster. Beginning on April 9, the President has mandated higher retaliatory tariffs for 60 nations designated as “worst offenders.” The European Union, China, India, and Japan are subject to 20%, 54%, 26%, and 24% charges, respectively, under Trump’s new tariff policy.
Trump declared that a 25% tariff would be applied to automobiles made in other nations. It is unclear how Trump’s proposed tariff policy would affect international trade.
Market worries about tense international trade have been heightened by China’s response to the tariff threat, which indicated intentions for retaliation.
Regardless of how positive the impending data is, it seems that given concerns about the war’s potential to worsen, the next several days could have even more negative effects on US and international stocks. There may yet be optimism that Trump will temper his tough stance and acknowledge the possible harm his protectionist policies could create, which could lead to an agreement on fair terms, said to Samer Hasn, Senior Market Analyst at XS.com.
