President Donald Trump’s recent criticism of Federal Reserve Chair Jerome Powell has caused significant uncertainty in the stock market. On Monday, stocks fell sharply as Trump launched a fresh wave of criticism against Powell, branding him as a “major loser.”
The S&P 500 dropped 125 points, or 2.4%, to close at 5,158, while the Dow Jones Industrial Average tumbled 972 points, or 2.5%, to 38,170. The tech-heavy Nasdaq Composite sank even more sharply, dropping 2.5%.
Chris Zaccarelli, chief investment officer for Northlight Asset Management, said in an email, “Investors are in a foul mood, selling stocks and bonds and buying gold, and we believe this is a result of weakening confidence among global investors — as well as some U.S.-based investors — as news breaks of assaults on the Fed’s independence and increasing concerns about shaking up the existing world order.
The shaky start in the U.S. stock market on Monday follows another volatile week, as investors weigh the impact of the Trump administration’s tariffs and a potential Fed shakeup on economic activity. President Trump and his team have floated the idea of firing Powell, who Mr. Trump tapped to lead the central bank during his first term in 2017.
Although many legal experts — and Powell himself — say the president lacks the authority to fire a Fed chief, Mr. Trump’s fierce criticism has fueled investor concerns that the White House could defy norms and seek to replace the central bank chief. Referring to Powell, Mr.
Trump’s attack impacts stock market
Trump said on Monday that the economy could slow down “unless Mr. Too Late, a major loser, lowers interest rates, NOW.” Mr.
Trump has put increasing pressure on Powell to lower the Fed’s benchmark interest rate, which would spur economic growth but also risk boosting inflation. Adam Crisafulli, head of Vital Knowledge, said in a report, “The problem is that Powell’s term still has more than a year to go while Trump’s tariffs haven’t even shown up in the data, which means the battle between the Fed and White House could get a lot worse in the coming months.
A landmark Supreme Court ruling from 1935 upholds the independent authority of the Fed and would make it difficult to fire Powell before his term concludes on May 15, 2026. But that hasn’t stopped Mr.
Trump is aiming at Powell, who has stood firm against cutting interest rates until the Fed has more economic data on how tariffs will affect the economy. Chicago Fed president Austan Goolsbee said on “Face the Nation” yesterday, “I strongly hope that we do not move ourselves into an environment where monetary independence is questioned. Because that would undermine the credibility of the Fed.”
Investors this week will also focus on corporate earnings from major technology companies, known informally as the “Magnificent Seven,” which include Amazon, Google parent Alphabet, Apple, Facebook parent Meta Platforms, Microsoft, Nvidia, and Tesla.
Since Mr. Trump’s inauguration on January 20, the combined market value of the Magnificent Seven has dropped by $3.8 trillion, or 22%, as of April 20.
