(Bloomberg) — China investors are bracing for a grim Monday as the nation’s markets return from an extended weekend and factor in its retaliation to US tariffs.

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A gauge of Chinese stocks listed in the US plunged 8.9% on Friday, the most since October 2022, amid global market turmoil after Beijing announced 34% tariffs on all imports from the US. That came during a holiday for Chinese and Hong Kong equities, which will restart trading on Monday.

A fall of similar magnitude in the local shares could put multiple Chinese equity gauges — such as this year’s top major global performer, the Hang Seng China Enterprises Index — into a technical correction, and in some cases close to a bear market. That would end a nascent recovery in the country’s assets, unless mainland-based investors and bargain hunters step in to cap the slide.

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The quick retaliation by China, following US President Donald Trump unleashing the steepest increase in tariffs in a century last week, has raised the odds of a global recession. The heavy selloff in US-listed Chinese stocks also reflected fears of further tit-for-tat responses between the world’s top two economies.

“It will be an ugly start on Monday, which will be a buying opportunity for me,” said Xin-Yao Ng, a fund manager at Aberdeen Investments. “Some estimates suggest tariff wars can bring down China’s GDP growth by 2 percentage points, but the government will negate that pain with stimulus and trade deals with non-US countries in the due course.”

So far this year, Chinese stocks have shown resilience despite rising trade tensions. That’s been driven by optimism about the country’s advancements in artificial intelligence and bets that external pressure will prompt policymakers to increase economic support. The MSCI China Index has risen 13% year-to-date, compared to an almost 14% drop in the S&P 500 Index.

Goldman Sachs Group Inc. trimmed its 12-month targets for Chinese equity indexes in a report on Sunday. The MSCI China Index target was cut to 81 from 85, while the CSI 300 Index outlook was lowered to 4,500 from 4,700 over the same time frame, analysts including Kinger Lau said.

“The bull run will slow on event risks and profit-taking pressures,” the analysts said. “The market may test our risk-case valuations in the short term until trade and policy clarity emerges, and/or a new tariff equilibrium is reached.”