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Futures down: S&P 500 2.51%, Nasdaq 100 2.56%, Dow 2.32%

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Howmet Aerospace ( HWM ) falls on report it may halt orders if hit

by

tariffs

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S&P 500, Dow futures down 20% from record highs

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Investors expect more US rate cuts this year

(Updates before market open)

By Pranav Kashyap and Purvi Agarwal

April 7 (Reuters) - Wall Street's main indexes braced

for steep losses at the open on Monday, with the S&P 500 near

bear market territory, as investors sought refuge in government

bonds on economic worries over the fallout of U.S. President

Donald Trump's sweeping tariff plans.

The 10-year U.S. Treasury yields fell to 3.986%,

with investors pricing in a chance of a fifth interest-rate cut

from the Federal Reserve this year.

Futures, however, pared losses slightly after White House

economic adviser Kevin Hassett played down economic concerns

over Trump's tariffs, saying the U.S. president has talked to

world leaders all weekend and will listen to proposals for

"great deals".

S&P 500 E-minis were down 128.25 points, or 2.51%,

Nasdaq 100 E-minis were down 449.75 points, or 2.56%,

and Dow E-minis were down 892 points, or 2.32%.

"What we're seeing is more of a technical bounce after a

very steep selloff, but it's not necessarily the end of the

selloff," said Fiona Cincotta, senior market analyst at City

Index.

"For that to happen, we would need to see fundamental

changes such as Trump walking back some trade tariffs or some

sense that the global economy will perform okay regardless, or

central banks stepping in to support economies."

S&P 500 futures are down more than 20% from their peak,

suggesting the benchmark index is heading toward bear

market territory. If the index ends down 20% from its all-time

closing highs, it would confirm the index has been in a bear

market since February.

Futures linked to the Dow also fell 20% from their record

high.

Trump announced hefty tariffs against U.S. trading partners

last week, sparking retaliation from China and fueling concerns

that the trade war will impede economic growth and stoke

inflationary pressures.

In the two sessions after Trump's tariff decision, the S&P

500 has tumbled 10.5%, erasing nearly $5 trillion in market

value, marking its most significant two-day loss since March

2020.

Trump told reporters late on Sunday that investors must

endure the consequences and that he would refrain from

negotiating with China until the U.S. trade deficit is

addressed.

Futures tracking the U.S. small-cap Russell 2000 index

tumbled 3.3%, underscoring concerns about the health of

the domestic economy.

The CBOE Volatility index, seen as Wall Street's fear

gauge, was at 48.89 points, its highest since August 2024.

Stocks fell across the board in premarket trade, with

megacaps continuing to bear the brunt. Apple ( AAPL ) was down

2.7%, Nvidia ( NVDA ) lost 4.8%, while Amazon.com ( AMZN ) shed

2.1%.

Howmet Aerospace ( HWM ) dropped 5.2%, after a report said

the aircraft parts supplier may halt some shipments if they are

impacted by Trump's tariffs.

The sharp declines in the past two sessions pushed the

tech-heavy Nasdaq into bear market, while the Dow Jones

Industrial Average slumped more than 10% from its

record-closing high.

The fear of a tariff-led recession caused markets to bring

into play the chances of an interest-rate cut in May, with

traders seeing a near 60% possibility, according to data

compiled by LSEG.

Several speeches by Fed officials and a series of economic

indicators, including consumer price data, are slated throughout

the week, with markets keenly observing any signals of

recessionary fears.