United States benchmark averages fell sharply on Monday (Tuesday AEST) as President Donald Trump renewed his attacks on Federal Reserve Chair Jerome Powell, reviving investor concerns about the central bank’s independence amid a backdrop of ongoing global trade tensions.
The Dow Jones Industrial Average slid by 971.8 points, or 2.5%, closing at 38,170.4. The S&P 500 declined 2.4% to finish at 5,158.2, while the Nasdaq Composite dropped 2.6% to 15,870.9.
Losses were driven by major technology stocks, with Tesla plunging 5.8%, Nvidia falling over 4%, and Amazon and Meta each down by 3%. Industrial heavyweight Caterpillar also slipped 2.8%.
In a post on Truth Social, Trump referred to Powell as “Mr. Too Late, a major loser”, claiming the economy would weaken unless interest rates were cut immediately.
The post followed previous criticism in which Trump hinted at Powell’s removal - a possibility that White House economic adviser Kevin Hassett said was being considered by Trump’s team.
The comments heightened market anxiety over the central bank’s policy direction and independence. The U.S .dollar weakened, falling to fresh three-year lows, while gold prices soared to a record above US$3,400 per ounce amid heightened risk aversion.
Investor sentiment was further rattled by deteriorating global trade relations. Hopes for progress were dashed as China issued warnings against any international agreements that could be detrimental to its interests.
On the bond markets, yields on 10-year Treasury notes rose by 2.2% to 4.415%, while the 2-year yield declined 0.7% to 3.773%.
