U.S. stocks fell sharply on Monday, marking one of the worst single-day sell-offs in recent months as markets reacted to mounting political and economic uncertainties. The Dow Jones Industrial Average dropped 972 points, or 2.48%, while the S&P 500 lost 2.36%. The tech-heavy Nasdaq Composite slid 2.55%, capping a widespread selloff that rattled nearly all sectors.
Key Points:
- Dow plunges 972 points; S&P 500 and Nasdaq post steep losses
- Dollar hits lowest level in three years amid Fed independence concerns
- Trump renews attacks on Fed Chair Jerome Powell, calling him a “major loser”
- Analysts worry about erosion of confidence in U.S. markets and economic leadership
- Safe-haven gold soars to record high as dollar and equities drop
- Uncertainty around tariffs and Q1 earnings outlook clouds investor sentiment
The downturn comes amid fresh turmoil in Washington, as President Donald Trump escalated his campaign to remove Federal Reserve Chair Jerome Powell. Trump’s criticism of Powell has intensified in recent days, culminating in a social media post labeling the Fed chief a “major loser” and expressing frustration over the central bank’s reluctance to cut interest rates.
“If I want him out, he’ll be out of there real fast, believe me,” Trump told reporters in the Oval Office, reinforcing his desire to dismiss Powell despite legal uncertainty surrounding the move.
Markets are growing increasingly concerned about the president’s interference in monetary policy. Analysts warn that any attempt to fire Powell would severely undermine the Fed’s credibility and further shake investor confidence in U.S. financial stability.
“Wall Street doesn’t like the idea of the White House trying to control the central bank,” said Sam Stovall, chief investment strategist at CFRA Research. “That would not be a good thing over the long term.”
The uncertainty around Powell’s position comes just as the Fed is scheduled to meet in early May. According to the CME FedWatch Tool, nearly 88% of traders currently expect the central bank to hold interest rates steady.
Meanwhile, investors are also reacting to the lack of progress on the trade front. Trump’s ongoing tariff threats and the failure to reach an agreement with Japan last week have dampened hopes of a near-term resolution. Analysts from Macquarie note that a prolonged period of bilateral trade negotiations could stretch into July, delaying clarity for businesses and markets alike.
“The lack of a trade deal and the pressure on Powell are a one-two punch to investor sentiment,” said Thierry Wizman, global FX strategist at Macquarie. “Confidence in the dollar and in U.S. policy direction is fading.”
Reflecting this shift, the U.S. dollar index fell more than 1%, hitting its lowest level in over three years. Safe-haven assets like gold surged as investors fled risk. Gold jumped over 3% to surpass $3,400 per troy ounce — a fresh record high and a sign of growing caution in the global investment community.
The yield on the 10-year Treasury note also climbed, topping 4.4%, suggesting concerns about inflation and potential long-term rate hikes driven by tariff-induced price pressures.
Adding to the volatility, investors are now turning their attention to the first quarter earnings season. Major firms including Tesla and Alphabet are set to report results this week, with markets eager to hear executive outlooks amid growing macroeconomic headwinds.
Tesla shares fell 5.75% on Monday ahead of its earnings release on Tuesday. Alphabet dropped 2.31% and is expected to report on Thursday. Analysts believe corporate commentary on tariffs, interest rates, and consumer demand will shape near-term market direction.
“Tariffs will remain top of mind over the coming few months, yet investors are likely to refocus their short-term attention on the Q1 2025 earnings reporting period,” said CFRA’s Stovall.
In the background, rising gold prices, a tumbling dollar, and heightened political pressure on the Federal Reserve are reshaping the economic landscape. As Trump continues his unconventional approach to economic leadership, markets are bracing for more volatility ahead.
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