Global Stocks Drop on Fed Independence Concerns
Trump Fed Criticism Market Reaction triggered a sharp decline in global stocks and currency markets on Monday after former President Donald Trump criticized Fed Chair Jerome Powell and implication of investigating alternatives to remove him. Traders read the comments as a threat to the Fed’s independence, which set off a general sell-off in Asian and American stock futures. Early trading saw declines of more than 1% for major Wall Street indices including Dow Jones, S&P 500, and Nasdaq; Stoxx 600 from Europe likewise slid.
Reuters
U.S. Dollar Weakens, Safe Haven Rally
While the euro rose 0.8% and the yen appreciated 0.6%, the US dollar slumped against other major currencies. Investors crowded to conventional safe-haven assets:
- Gold shot to a brand-new record high of $3,370.17 per ounce.
- Against the dollar, Swiss franc peaked in over ten years.
Drivers of the movement were cited by market players growing worries about possible political influence in monetary policy and rising trade tensions.
CNN
Under Pressure: Technology and Electric Vehicles Stocks
Several well-known technology and electric-vehicle companies saw declining shares ahead of quarterly earnings releases:
- Having already shown a 40% year-to- date drop, Tesla’s traded down 1.5%.
- Early gains also were given up by Alphabet and Intel as risk attitude changed.
Analysts cautioned that any more rhetoric undermining the Fed could aggravate volatility in these sectors focused on growth, which mostly depend on favorable borrowing conditions.
Oil Prices Slip on Policy and Trade Concerns
While progress in U.S.–Iran nuclear negotiations eased some supply issues, oil futures dropped 1.8% as a result of Trump administration tariff threats on trading partners. Crude oil settled close to $70 per barrel, a reflection of concerns about increased tariffs perhaps lowering world demand.
The Reuters
Outlook: Uncertain Waters Ahead
Now, investors must delicately balance possible political pressure at home with the Fed’s forthcoming policy meetings. Maria Alvarez, chief strategist at Global Markets Inc., observed, “The combination of central bank uncertainty and trade disputes is creating one of the most challenging environments we’ve seen in years.”
Shaken market confidence will cause traders to closely monitor any additional Washington development as well as ongoing tariff negotiations. Safe-haven buying and defensive posture are probably going to be constant in the meantime.