U.S. stock futures plunged sharply on Sunday evening, signaling a turbulent start to the trading week as financial markets brace for the next chapter in President Donald Trump’s escalating trade war.

Futures tied to the S&P 500 dropped more than 3%, while contracts on the Nasdaq tumbled 4%, reflecting investor fears of deepening damage to the tech sector. Dow futures fell around 2.5%, or roughly 1,000 points, marking a continuation of last week's historic sell-off.

The downturn comes as Trump's sweeping tariff strategy begins to take full effect, sending shockwaves through global markets. A new 10% baseline duty on most U.S. trading partners came into force over the weekend, with additional penalties targeting nations labelled as "bad actors" slated to begin midweek.

Oil markets also felt the sting, with prices dropping over 3% and crude sliding below $60 per barrel for the first time since 2021.

Last week saw Wall Street suffer its worst performance since the onset of the COVID-19 pandemic, with more than $5 trillion in market value erased. The Nasdaq officially entered bear market territory on Friday, having dropped more than 20% from its recent highs. The S&P 500 is nearing the same threshold, and the Dow closed last week in a technical correction.

Despite mounting pressure, Trump has remained firm. In a statement Sunday evening, he likened the market fallout to “taking medicine,” suggesting that short-term pain may be necessary to secure long-term gains. “We’re not trying to crash the market,” he added, but emphasized his commitment to realigning global trade.

The international response has been swift. China has already rolled out retaliatory tariffs, while the European Union is preparing its own set of countermeasures. This brewing trade confrontation has led to deep unease among investors and prompted a growing number of analysts to reassess their economic forecasts.

Notably, JPMorgan became the first major U.S. bank to predict a recession later this year, a stark reversal from its earlier projections of steady economic growth.

Still, the administration remains defiant. Treasury Secretary Scott Bessent and chief economic adviser Kevin Hassett took to Sunday news programs to defend the policy. They argued that over 50 countries have expressed interest in opening negotiations, even as logistical challenges loom.

Commerce Secretary Howard Lutnick underscored the administration's resolve, saying the tariffs would "definitely stay in place for days and weeks," adding that the current measures are just the beginning.

As the world watches this high-stakes economic gambit unfold, all eyes are on how markets will respond when the opening bell rings on Monday. With volatility surging and investor sentiment shaken, Wall Street appears headed into uncharted territory.

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