The US Stock Market Falls as Trump Escalates His Attacks on Fed Chair Powell

U.S. stock index futures declined on Monday as growing tensions between President Donald Trump and Federal Reserve Chair Jerome Powell unsettled investors. The president’s latest criticism of Powell raised concerns about the central bank’s independence — an issue that comes amid mounting unease over the ongoing trade conflict between the U.S. and China.

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On Friday, White House economic adviser Kevin Hassett revealed that Trump’s team is exploring the legal possibility of removing Powell from his role. This followed the president’s comments a day earlier, where he posted that Powell’s “termination cannot come fast enough,” renewing his pressure on the Fed to cut interest rates.

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These ongoing verbal attacks have fueled investor concerns that political influence may begin shaping monetary policy decisions in the U.S. Such fears have contributed to a growing sense of instability, especially at a time when global markets are already navigating significant trade-related uncertainty. Analysts say these actions could erode trust in the Federal Reserve — an institution that traditionally operates independently to manage inflation and support economic growth.

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“Monetary policy is a fairly blunt tool for controlling inflation over the medium term,” said Paul Donovan, chief economist at UBS Global Wealth Management. “Its effectiveness relies heavily on public confidence in the central bank. That trust takes years to build — but it can be lost very quickly.”

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As of 6:48 a.m. Eastern Time, stock futures reflected broad selling. Dow Jones futures were down 344 points, or 0.87%, while S&P 500 futures dropped 53.75 points, or 1.01%. Nasdaq 100 futures shed 209.25 points, down 1.14%. Futures tied to the small-cap Russell 2000 index also fell, down 0.8%.

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Wall Street's "fear gauge," the CBOE Volatility Index (VIX), spiked more than 2.5 points, signaling rising anxiety among traders. With markets just reopening after the Good Friday holiday, trading volumes remained relatively light, adding to the day’s volatility. The U.S. dollar weakened against a basket of major currencies, while safe-haven assets like gold surged as investors looked for stability.

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Gold mining stocks saw early gains in premarket trading. Shares of Newmont rose 2.8%, and U.S.-listed shares of Barrick Gold climbed 3.6%. However, most large-cap technology and growth stocks were under pressure.

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Tesla shares slid 2.5% following a Reuters report that the company’s release of its lower-cost Model Y vehicle had been postponed. Nvidia dropped 3.2% after a separate Reuters report said Chinese tech giant Huawei plans to begin mass shipping a sophisticated AI chip to local clients as soon as next month, potentially adding pressure to Nvidia’s market position.

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Investor sentiment was further dampened by escalating tariff tensions. China issued a warning to other countries about aligning too closely with the United States in trade negotiations, emphasizing that such cooperation should not come at Beijing’s expense. This added another layer of complexity to an already strained global trade environment.

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The uncertainty has spilled over into expectations for U.S. monetary policy. Traders are now anticipating nearly a full percentage point in interest rate cuts from the Federal Reserve by the end of the year, based on data from LSEG.

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Federal Reserve officials have acknowledged in recent weeks that ongoing tariff-related uncertainty is weighing heavily on their economic outlook. Despite the Fed’s previous caution about interest rate cuts, the combination of trade and political volatility may force policymakers to act in an effort to support growth.

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The S&P 500 has struggled this year, falling more than 10% since January and down about 14% from its all-time high reached in February. The combined weight of trade tensions, questions about central bank independence, and broader macroeconomic uncertainty have all contributed to the index’s underperformance.

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With these headwinds in mind, investors are turning to corporate earnings reports this week for signs of how companies are managing the uncertain landscape. Tesla and Alphabet, two members of the high-profile “Magnificent Seven” megacap tech stocks, are among the first to report results.

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On a more positive note, Netflix shares gained 3.2% after the streaming service offered an encouraging revenue forecast, suggesting that demand remains resilient even amid potential economic headwinds. Capital One Financial also rose 4.1% after U.S. banking regulators approved its $35.3 billion acquisition of Discover Financial Services.

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Overall, the start of the trading week reflects heightened sensitivity to both political developments and economic data. Market participants are closely monitoring the Fed’s response to increasing pressure from the White House, the outlook for global trade, and signals from major corporate earnings — all of which could shape the trajectory of markets in the coming weeks.

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