U.S. stock index futures saw a significant drop on Monday, indicating a possible bear market for the S&P 500 due to concerns about the economic impact of President Donald Trump's tariff plans. Investors turned to government bonds, causing the 10-year U.S. Treasury yields to decline to 3.953%, amid expectations of further interest rate cuts by the Federal Reserve.

S&P 500 futures fell more than 20% from their peak, suggesting a bear market status since February if the index closes down 20% from its all-time highs. President Trump stated that investors would have to face the consequences, expressing his intention to cease negotiations with China until addressing the U.S. trade deficit.

Following Trump's tariff announcement, the index experienced a 10.5% drop over two days, wiping out nearly $5 trillion in market value, marking the largest two-day loss since March 2020. As of 4:42 a.m. ET (0942 GMT), U.S. stock index futures were significantly down, with the CBOE Volatility Index, indicating market fear, rising to 52.88.

The recent market decline pushed the Nasdaq into a bear market territory, while the Dow Jones Industrial Average dropped over 10% from its record high. Concerns about a recession driven by tariffs led to speculation about a possible interest rate cut in May, with a 54% likelihood predicted by traders.

Upcoming economic data releases, notably consumer price data on Thursday, are expected to impact market sentiment in the coming week.