Trump’s renewed pressure on the Federal Reserve and rising tensions with China trigger widespread market losses and investor caution.
U.S. stock markets suffered steep declines on Monday after former President Donald Trump reignited tensions with Federal Reserve Chair Jerome Powell and escalated his tariff threats against China, prompting concerns about economic instability and monetary policy uncertainty.
The Dow Jones Industrial Average dropped 971 points (-2.48%), while the S&P 500 and Nasdaq Composite sank 2.36% and 2.55%, respectively. The downturn was led by sharp losses in tech stocks, which bore the brunt of investor unease.
Tech Stocks Slammed as Fed Independence Comes Under Fire
Tech companies took heavy hits as Wall Street responded to Trump’s Truth Social tirade, in which he labeled Powell “Mr. Too Late” and demanded immediate interest rate cuts.
Tesla tumbled 7%, while Nvidia fell 6%. Other tech leaders — Amazon, AMD, and Meta — each dropped around 4%, reflecting investor fears over policy-driven volatility and uncertain monetary leadership.
Trump’s continued speculation about removing Powell if re-elected has further stirred market anxiety over the Fed’s long-held autonomy.
“Interference with central bank policy is never well-received by markets,” said a senior strategist at Fidelity. “It raises red flags around inflation control and long-term financial stability.”
Gold and Bitcoin Surge as Dollar Weakens
Amid the selloff, investors fled to traditional and digital safe-haven assets. Gold surged past $3,400 per ounce for the first time ever, while Bitcoin rose above $87,000, reflecting heightened risk aversion and uncertainty surrounding U.S. economic policy.
Simultaneously, the U.S. dollar weakened significantly, hitting its lowest point since 2022, a reaction to concerns over potential rate cuts and long-term inflationary pressure.
China Trade Tensions Add Fuel to Market Slide
Compounding market worries, U.S.-China trade tensions flared again. China reportedly halted imports of several U.S. commodities in response to the new round of tariffs unveiled by Trump on April 2.
Beijing also issued diplomatic warnings to countries considering partnerships with the U.S. that might threaten Chinese economic interests, hinting at a hardline approach to future trade alliances.
Since the tariff announcement, the S&P 500 has dropped over 8%, while the Nasdaq and Dow have lost nearly 10% and 9%, respectively — highlighting the escalating market sensitivity to geopolitical risk.
Investor Focus Shifts to Corporate Earnings
With the earnings season underway, market participants are now bracing for key reports from Tesla and Alphabet, both of which could provide crucial insight into how major corporations are navigating inflation, supply chain disruptions, and trade uncertainty.
“Any signs of softness in forward guidance could accelerate the selloff,” warned a Goldman Sachs equity analyst.
Outlook: Policy Uncertainty Meets Geopolitical Volatility
The combination of monetary policy instability, tariff pressure, and soaring safe-haven demand suggests that markets are entering a period of elevated volatility.
Unless clarity emerges from the Federal Reserve and the White House, analysts expect continued market choppiness in the near term — with the Fed’s response and China’s countermeasures likely to drive the next wave of investor sentiment.
