NEW YORK/HONG KONG/LONDON/TOKYO/SYDNEY – Wall Street futures fell on Monday and the benchmark S&P 500 was set to confirm a bear market as investors piled into government bonds on worries over the ramifications of US President Donald Trump's sweeping tariff plans.

Earlier, stock markets across the Asia-Pacific and Europe traded sharply lower as financial turmoil sparked by the US "reciprocal tariffs" escalated recession fears worldwide.

The 10-year US Treasury yields fell to 3.986 percent, with investors pricing in a chance of a fifth interest-rate cut from the Federal Reserve this year.

Futures, however, cut losses sharply from earlier in the session. S&P 500 E-minis were now down 120 points, or 2.35 percent, Nasdaq 100 E-minis were down 476.5 points, or 2.72 percent, and Dow E-minis were down 805 points, or 2.09 percent.

The Hang Seng Index’s 13.22 percent drawdown in Hong Kong was the largest since the height of the global financial crisis in 2008.

In Japan, the benchmark Nikkei stock index ended down 2,644.00 points, or 7.83 percent, from Friday at 31,136.58, its third-largest point drop on record. The broader Topix index, meanwhile, finished 193.40 points, or 7.79 percent, lower at 2,288.66. 

"Japanese stocks are unlikely to stop declining unless US stocks cease falling further," said Yutaka Miura, senior technical analyst at Mizuho Securities Co.

ALSO READ: Hong Kong's Hang Seng closes 13.22% lower

MSCI's gauge of Asia-Pacific shares fell a gut-wrenching 7.8 percent to head for its largest single-day drop since 2008.

South Korea dropped 5 percent. Due to the sharp decline, the bourse operator once placed a sidecar order at 9:12 am, pausing program buying for five minutes, after the KOSPI 200 index fell more than 5 percent for over one minute.

It was the first sidecar order for program buying since August 2024, according to local reports.

The KOSPI plummeted as investors sold off stocks in response to increasing concerns about a recession after the US government revealed "reciprocal tariffs" last week, said analysts here.

Stocks in Singapore dipped over 7 percent at the start of Monday due to concerns about a global trade conflict following several countries mulling to respond to US tariffs.

The Straits Times Index plunged 7.37 percent, or 281.84 points, to 3,544.02 as Asian markets fell sharply.

READ MORE: Australian dollar drops to 5-year low below 60 US cents

Meanwhile, Indian shares declined at the beginning of trading on Monday, with the key Nifty index dropping over 3 percent.

The Nifty 50, representing the biggest Indian firms on the national stock exchange, was down 3.55 percent.

The Nifty IT, comprising India's leading information technology firms, which consider the United States their largest market, was down 5.53 percent.

Local media house The Times of India called Monday's loss a "bloodbath".

The Australian share market has recorded its biggest single-day fall since 2020. The S&P/ASX 200 – Australia's benchmark share market index – closed down 4.2 percent on Monday to 7,343.3 points in a plunge worth more than 100 billion Australian dollars (about $60 billion).

The Australian Broadcasting Corporation reported that it was the index's biggest one-day fall since May 2020.

It marks a fall of 14.1 percent from the market's record-high close of 8,555.8 points on Feb 14 and the index's lowest close since December 2023.

The benchmark was down more than 6 percent within minutes of opening on Monday in a wipeout worth about 160 billion Australian dollars but rebounded slightly.

Australia's banking, energy and mining sectors were among the hardest hit.

The Commonwealth Bank of Australia – the nation's largest bank – closed down 6.2 percent and multinational mining giant BHP was down 6.1 percent.

Earlier on Monday, the value of the Australian dollar fell below 60 US cents for the first time since 2020.

ALSO READ: Japan’s PM Ishiba seeks broad tariffs deal as stocks rout deepens

Treasurer Jim Chalmers said the market is expecting multiple interest rate cuts over the course of the year starting when the Reserve Bank of Australia monetary policy board next meets in mid-May.

European shares plunged to a 16-month low on Monday as investors grappled with the possibility of a recession after US President Donald Trump showed no signs of letting up in his aggressive trade war.

The pan-European STOXX 600 slumped 5.8 percent at 0722 GMT, down for the fourth straight session and on track for its steepest one-day percentage decline since the COVID-19 pandemic.

Trade-sensitive Germany's benchmark index dove 6.1 percent, among the worst hit markets in the euro area. At one point the index was down more than 20 percent from its March all-time closing high. The index would confirm it has been in a bear market if it closes at session lows.

The gloomier outlook for global growth kept oil prices under heavy pressure, following steep losses last week.

Brent fell $2.2 to $63.40 a barrel, while US crude dived $2.75 to $59.23 per barrel.

Even gold was swept up in the sell-off, easing 0.3 percent to $3,026 an ounce.

The drop left dealers wondering if investors were taking profits where they could cover losses and margin calls on other assets, in what could turn into a self-feeding fire sale.

Markets swung to imply around a 56 percent chance the Fed could cut as soon as May, even though Chair Jerome Powell on Friday said the central bank was in no hurry on rates.