Stocks Are Set to Extend Sharp Fall

Stock markets pointed to a further fall this week as futures trading got underway Sunday evening, with investors and economists grappling with rising odds of a severe economic downturn caused by President Trump’s significant new tariffs on imports.

Futures on the S&P 500, which allow investors to bet on the index before the official start of trading on Monday, dropped roughly 4 percent. The 10.5 percent drop on Thursday and Friday in the S&P 500 was the worst two-day decline for the index since the onset of the coronavirus pandemic in 2020.

The only other instances of a worse two-day fall came during the 2008 financial crisis and the 1987 stock market crash, according Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. In dollar terms, the more than $5 trillion that was wiped out in the S&P’s value in the two days last week stands unmatched.

Even more unusual is that last week’s sell-off stemmed directly from presidential policy. Mr. Trump has so far brushed off concerns about the market reaction and potential economic consequences, showing little intention of backing down.

“The reason I believe this is the biggest debacle ever seen in the markets is because it’s purely self-inflicted by Trump,” said Dan Ives, a veteran tech analyst at Wedbush Securities, warning that if the tariffs announced last week remain in place, they will set the U.S. tech industry back a decade and offer a boost for China’s foray into artificial intelligence.

“The economic pain that will be brought by these tariffs is hard to describe,” he said.

The historically high tariffs that Mr. Trump announced on Wednesday caught investors, economists and businesspeople off guard, upending global economic forecasts.