Updates after markets open

By Pranav Kashyap and Purvi Agarwal

April 7 (Reuters) - Wall Street's main indexes fell sharply on Monday and the S&P 500 was on track to confirm a bear market as investors sought refuge in government bonds on economic worries over the fallout of U.S. President Donald Trump's sweeping tariff plans.

The S&P 500 fell 20% from its record closing high logged in February. 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.

The blue-chip Dow is down nearly 17% from its December all-time high.

The Dow Jones Industrial Average .DJI fell 1,626.09 points, or 4.24%, to 36,688.77, the S&P 500 .SPX lost 229.94 points, or 4.52%, to 4,844.51, and the Nasdaq Composite .IXIC lost 773.28 points, or 4.96%, to 14,814.51.

All three indexes were at more than one-year lows.

Technology stocks .SPLRCT were down 5.4%, with megacaps continuing to bear the brunt. Apple AAPL.O fell 6.3%, Nvidia NVDA.O lost 7.1%, while Microsoft MSFT.O shed 3.6%.

The small-cap Russell 2000 .RUT fell 4.6%, while the CBOE Volatility index .VIX was at 53.89 points, its highest since August 2024.

However, White House economic adviser Kevin Hassett played down economic concerns over Trump's tariffs, saying the president has talked to world leaders all weekend and will listen to proposals for "great deals".

"The only reason the market is not down a little bit more is that it seems like there is potential for off ramp ... the administration likes to make deals and likes to negotiate from position of strength," said Ross Mayfield, investment strategist at Baird.

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 the 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.

The sharp declines in the past two sessions pushed the tech-heavy Nasdaq into bear market territory, while the Dow Jones index 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.

Howmet Aerospace HWM.N dropped 3.3% after a report said the aircraft parts supplier may halt some shipments if they are impacted by Trump's tariffs.

Cryptocurrency-linked stocks also took a hit tracking a sharp drop in bitcoin prices. Strategy MSTR.O was down 12.3% and Mara Holdings MARA.O fell 7.8%.

Several speeches by Federal Reserve officials and a series of economic indicators, including consumer price data, are expected this week, with markets keenly observing any signals of recessionary fears.

Declining issues outnumbered advancers for a 23.21-to-1 ratio on the NYSE and a 11.26-to-1 ratio on the Nasdaq.

The S&P 500 posted no new 52-week high and 157 new lows, while the Nasdaq Composite recorded four new highs and 809 new lows.

(Reporting by Pranav Kashyap, Sruthi Shankar and Purvi Agarwal in Bengaluru; Editing by Arun Koyyur and Shounak Dasgupta)

((Pranav.Kashyap@thomsonreuters.com; +919886482111))