US equity futures pared earlier losses with traders increasing bets on Federal Reserve interest-rate cuts amid growing concerns that US President Donald Trump’s trade war will push the world’s largest economy into recession.

Contracts on the S&P 500 Index were down 2% as of 7:00 a.m. in New York on Monday, after the underlying index sank 10% in the previous two sessions. The rout in futures would leave the cash index on pace to fall more than 20% from its February record. Nasdaq 100 Index futures fell 2.1%, after the tech-heavy gauge entered a bear market Friday. Russell 2000 futures lost 4.2%. The Cboe Volatility Index, known as the Fear Gauge, jumped to 48, the highest level since the start of the Covid pandemic.