US stock futures declined as investors prepared for the implementation of President Trump's significant tariffs on major US trading partners starting Wednesday. Futures linked to the S&P 500 dropped by 1%, Nasdaq futures fell by 1.1%, and Dow Jones Industrial Average futures decreased by 1.1%.

Trump's "reciprocal" tariffs, which caught markets off guard last week, officially came into effect at 12:01 a.m. Wednesday, causing turmoil on Wall Street. Stocks experienced volatility, with the S&P 500 nearing bear market territory, and the Nasdaq Composite and Dow reaching their lowest levels since January 2024.

China is facing steep tariffs of 104%, with other countries like Vietnam, Japan, and India also dealing with substantial tariff increases. Several US trading partners are already subject to a minimum 10% "blanket" tariff imposed over the weekend.

Market attention was on the US-China trade tensions on Tuesday, as China expressed readiness to battle if necessary, and the White House confirmed plans to raise tariff rates on China to 104% in response to retaliatory measures. Amid the uncertainty, Treasury Secretary Scott Bessent hinted at optimism for favorable trade deals, with Japan potentially being a key negotiation partner post facing a 24% tariff.

Investors are closely monitoring the beginning of the first-quarter earnings season, with Delta in focus after revising its guidance due to economic uncertainties. Additionally, the release of the Consumer Price Index on Thursday will give insights into inflation trends before the full enforcement of Trump's tariffs.