On Monday, stock markets experienced a significant downturn as traders closely monitored ongoing trade discussions and the latest remarks from President Donald Trump criticizing Federal Reserve Chairman Jerome Powell.
The Dow Jones Industrial Average plunged over 1,000 points, marking a decline of 2.8%. In tandem, the S&P 500 and Nasdaq Composite fell by 2.9% and 3.2%, respectively.
In a post on Truth Social, Trump took aim at Powell, asserting that energy and food prices have drastically decreased, claiming there is “virtually No Inflation.” He added, “With these costs trending down so nicely, just what I predicted they would do, there can almost be no inflation, but there can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW.”
These comments follow a previous post from Trump in which he described Powell as “always TOO LATE AND WRONG,” expressing impatience for Powell’s departure from his role.
Energy stocks were particularly hard hit, declining by 2.3%. Additionally, notable losses among major tech and consumer discretionary companies further pressured the information technology sector.
The shares of the so-called “Magnificent Seven” also faced a downturn, with Tesla’s stock dropping 7% and Nvidia’s shares falling over 5% during afternoon trading.
Trump’s continued criticism of Powell has raised concerns regarding the Federal Reserve’s autonomy in determining monetary policy for the world’s largest economy, contributing to a lack of confidence among investors in U.S. assets, which were already battered by the administration’s extensive trade tariffs.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| I:DJI | DOW JONES AVERAGES | 38043.36 | -1,098.87 | -2.81% |
| SP500 | S&P 500 | 5129.44 | -153.26 | -2.90% |
| I:COMP | NASDAQ COMPOSITE INDEX | 15771.071868 | -515.38 | -3.16% |
| TSLA | TESLA INC. | 241.37 | -0.18 | -0.07% |
| NVDA | NVIDIA CORP. | 101.49 | -3.00 | -2.87% |
THESE ARE THE US INDUSTRIES THAT COULD BE WALLOPED BY TARIFFS ON CHINA
Austan Goolsbee, president of the Federal Reserve Bank of Chicago, stressed the importance of central bank independence in a recent CBS appearance on “Face the Nation with Margaret Brennan.” He noted, “There’s virtually unanimity among economists that monetary independence from political interference is really important for the Fed or any Central Bank to do the job that it needs to.”
Goolsbee expressed concern over potential political influences on the central bank, emphasizing, “I strongly hope that we do not move ourselves into an environment where monetary independence is questioned, because that – that would undermine the credibility of the Fed.”
Concerns about tariffs persist, especially following China’s caution against unfavorable agreements with the U.S. Federal Reserve officials have also highlighted the uncertain trajectory of interest rates due to trade-related anxieties.
Market analysts are now anticipating approximately 90 basis points of interest rate reductions from the Federal Reserve within the year, according to data from LSEG.
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This year, uncertainty over trade policies and monetary decisions has significantly impacted stock performance, with the S&P 500 down more than 15% since its peak in February.
Finance Newso Business’ Eric Revell and Reuters contributed to this report
