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Futures down: Dow 1.37%, S&P 500 1.21%, Nasdaq 1.07%

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Delta Airlines beats Q1 profit estimates

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Drugmakers fall after Trump reiterates plans for pharma

import

tariffs

(Updates with comment, prices)

By Shashwat Chauhan and Purvi Agarwal

April 9 (Reuters) - U.S. stock index futures fell

sharply on Wednesday after China announced more levies on U.S.

goods, retaliating to President Donald Trump's reciprocal

tariffs that took effect earlier in the day.

The world's second largest economy would impose additional

tariffs of 84% on all U.S. goods from April 10, up from the 34%

previously announced, China's finance ministry said.

As hopes of concessions faded and tariffs on dozens of

countries began, investors ramped up their exit from stocks,

industrial commodities and even government bonds.

At 07:21 a.m., Dow E-minis were down 517 points, or

1.37%, S&P 500 E-minis were down 1.21% to 4,959.75 and Nasdaq

100 E-minis were down 183.75 points, or 1.07%

The CBOE Volatility index - seen as Wall Street's

'fear gauge' - was last at 54.31 points, hovering nearing its

highest since August.

"I do think that this is a game of 'chicken' in the sense

that both sides are upping the barriers," said Peter Andersen,

founder of Andersen Capital Management.

"What we're seeing now is a complete correlation between any

news related to tariffs and the stock market reactions."

Prospects of tariff deals had lifted U.S. equities on

Tuesday, sparking a rally early in the session, though gains

were not sustained and all three major indexes closed down.

Since Trump unveiled his tariffs last Wednesday, the S&P 500

has shed more than $5.83 trillion in market value and

will confirm a bear market, if it closes more than 20% below its

record high. As of last close, it was down 19% from its peak.

Most megacap and growth stocks fell in premarket trading,

with Apple ( AAPL ) down 1% and Meta Platforms ( META ) off

1.3%.

Oil prices fell to their lowest levels since February 2021,

dragging top players Exxon Mobil ( XOM ) and Chevron ( CVX )

down over 2% each. SLB was off 3.7%.

Meanwhile, government bond yields rose and prices dropped

as rising fears of a U.S. recession boosted expectations of

interest-rate cuts by the Federal Reserve.

The yield on the 10-year note briefly jumped to

its highest level since February and was last at 4.384%.

Traders see more than 100 basis points of easing by the

December, implying four fully priced-in 25-basis-points cuts,

according to LSEG data.

Minutes from the Fed's March policy meeting are due later in

the day, while a consumer price inflation reading is set for

Thursday, which could offer more clues on the inflation

trajectory.

U.S. drugmakers slid after Trump reiterated plans for

"major" tariffs on pharmaceutical imports. Eli Lilly ( LLY )

fell 3.3% and AbbVie ( ABBV ) 4.1%.

U.S.-listed shares of Chinese firms saw robust gains,

tracking advances in their domestic peers as state holding

companies and Chinese brokerages continued to support the

market.

Among individual stocks, e-commerce giant Alibaba

gained 3.1% while the iShares MSCI China ETF added 3%.

Delta Airlines gained 3.1% after beating estimates

for first-quarter profit, despite flagging impact to travel

demand from tariff-driven uncertainty.