Wall Street reels after Trump lashes out at Jerome Powell, pressures Fed for immediate rate cuts, and escalates tariff rhetoric against China.
U.S. equities tumbled Monday as former President Donald Trump stepped up his attacks on Federal Reserve Chair Jerome Powell and reignited trade tensions with China, triggering a broad market sell-off and surging demand for safe-haven assets.
The Dow Jones Industrial Average plunged 971 points, or 2.48%, to mark one of its worst single-day performances of the year. The S&P 500 slid 2.36%, while the Nasdaq Composite dropped 2.55%, led by a sharp retreat in high-growth tech stocks.
Tech Stocks Lead Declines Amid Fed Uncertainty
Tech heavyweights bore the brunt of Monday’s rout, with Tesla and Nvidia falling 7% and 6%, respectively. Amazon, AMD, and Meta Platforms each shed around 4%, as investors recalibrated expectations for interest rate policy and corporate earnings.
The losses came after Trump posted a scathing message on Truth Social, labeling Powell “Mr. Too Late, a major loser” and urging the Federal Reserve to slash interest rates immediately.
Trump has floated the idea of removing Powell if elected in November — a move that would raise serious concerns about the Fed’s independence and institutional stability.
“Markets are reacting to both political instability and policy uncertainty,” said one analyst at Morgan Stanley. “Rate expectations are becoming impossible to pin down.”
Dollar Sinks, Gold Breaks Record, Bitcoin Pops
The U.S. dollar fell sharply, sliding to its lowest level since late 2022, as traders priced in the possibility of a Fed rate cut under political pressure. In contrast, gold surged to an all-time high, topping $3,400 per ounce, driven by flight-to-safety trades and fears of renewed inflation volatility.
Bitcoin (BTC) also saw renewed buying interest, briefly spiking before stabilizing above $87,000, as digital assets continued to attract capital amid global macroeconomic uncertainty.
Trump’s Tariff Revival Deepens U.S.-China Trade Tensions
Beyond monetary policy, markets were rattled by intensifying U.S.-China trade hostilities. Following Trump’s April 2 announcement of a new wave of tariffs, China has reportedly halted or reduced imports of key American commodities — a retaliatory step that stoked fears of a prolonged economic cold war.
Chinese officials issued fresh warnings to countries contemplating trade alliances with Washington, cautioning against deals that may challenge Beijing’s strategic interests.
“This isn’t just a flare-up — it’s a coordinated shift in China’s trade posture,” noted a strategist at HSBC. “Beijing is signaling it will defend its economic turf aggressively.”
Since the tariffs were unveiled, the S&P 500 has fallen over 8%, while the Nasdaq and Dow have declined nearly 10% and 9%, respectively — reversing much of the year’s earlier gains.
Earnings Season Could Intensify Market Volatility
Adding to investor anxiety, the Q2 earnings season is kicking into high gear. Eyes are now on upcoming results from Tesla and Alphabet (Google’s parent company) for clues about consumer demand and macro headwinds.
Analysts are particularly focused on how margin pressures, global supply chains, and currency fluctuations are impacting the bottom lines of multinational tech firms.
“Earnings surprises — in either direction — could be the next catalyst,” said a JPMorgan equity strategist. “Volatility is here to stay.”
Looking Ahead: A Volatile Road for Global Markets
With Fed independence under scrutiny, tariffs disrupting global trade, and currency and commodity markets flashing risk signals, the coming weeks may prove pivotal for both investors and policymakers.
As markets digest political rhetoric and macro crosswinds, the question now is whether this latest correction is temporary turbulence — or the beginning of a deeper realignment in global financial conditions.
