Stan Choe, AP Business Writer
NEW YORK (AP) — U.S. stocks fell Monday as President Donald Trump’s concerns about the trade war and his criticism of the Federal Reserve system have led investors to withdraw from the United States further.
The S&P 500 is 2.8% lower with another wipeout, with the index at the heart of many 401(k) accounts falling more than 16% below the recordset two months ago.
The Dow Jones industrial average fell 1,062 points (2.7%) as of 11:45am Eastern time. Tesla and other major tech stocks had the most sharp losses, dragging Nasdaq composites to market-leading 3.2%.
Perhaps even more worrying, the value of the US dollar also sank as it continues to retreat from the US market. It’s an unusual move as the dollar has historically strengthened during past episodes of tension. However, this time it is a direct policy from Washington, which could cause fear and potentially undermine the dollar’s reputation as a pillar of the global economy.
Trump continued his harsh speech on world trade over the weekend, even as economists and investors say that if his harsh proposed tariffs do not set back, it could cause a recession. According to Macquarie strategist Thierry Withman, the US has so far failed to reach a transaction that could lower tariffs and protect the economy.
“The Golden Rules of Negotiation and Success: Those who have money make rules,” Trump said in an all-capital letter about his true social networks. He also said in every cap, as well as “businessmen who criticize tariffs are bad for business, but politics are really bad.”
Trump has recently focused more on China, the world’s second largest economy, and has heightened its own rhetoric for the world’s largest economy. China warned other countries on Monday that it would “sacrifice China’s interests” to trade with the US as Japan, South Korea and others attempt to negotiate an agreement.
“If this happens, China will never accept it and take a decisive step in a mutual way,” China’s Commerce Ministry said in a statement.
Also hanging in the market is concern over Trump’s anger towards Federal Reserve Chairman Jerome Powell. Trump once again criticized Powell last week for not cutting interest rates early to help give the economy more juice.
The Fed is resistant to slowing down speeds because they don’t want inflation to re-control after nearly all of their targets from over 9% three years ago to 2%.
“We spoke again about slowing the US economy unless the major loser, the loser, cuts interest rates,” Trump said Monday.
The move to fire Powell will send a big terrifying bolt through the financial markets. Investors always love low interest rates, but the bigger concern is that as they raise the prices of stocks and other investments, the non-independent Fed is not very effective in managing inflation in the long run. Such a move could be even weaker, if not killing the US’s reputation as the world’s safest place to maintain cash.
On Wall Street, several major tech stocks helped lead the index lower than the latest revenue report scheduled for later this week.
For example, Tesla sank 7%. Electric vehicle stocks fell about 50% below their record set record Monday after criticising the brand’s stock price was too high in December and that it was caught up in Elon Musk, the leader of the US government’s efforts to cut spending.
Nvidia fell 5.6% and was on track for the third consecutive time after it revealed that new US export restrictions on chips to China could undermine $5.5 billion in first quarter results. This was the heaviest weight on the S&P 500 500. It dropped by 3.5% on Apple, 2.5% on Microsoft, and 3.6% on Amazon.
It was another wipeout on Wall Street, with 97% of stocks within the S&P 500 falling.
Among the few benefits was the US government’s proposed merger and financial services that rose after Capital One Financial approved.
We discover 1.7% rose, but Capital One has dropped by 0.3%.
Gold was also rising, and unlike some others, it filled its reputation as a safe hull investment.
In the bond market, short-term Treasury yields have fallen as investors continue to live up to the ability to cut major overnight interest rates later this year to help the economy.
However, as Trump’s moves continue to raise questions about the US’s position in the global economy, long-term yields will spin up and down.
Treasury yields for the 2010 year period exceeded 4.40% in the morning, up from 4.34% at the end of last week to about 4% earlier this month. That’s a big move for the bond market. However, it later returned to 4.36%.
Meanwhile, the value of the US dollar has declined against the euro, Japanese yen, Swiss franc and other currencies.
In the overseas stock market, Tokyo’s Nikkei 225 fell 1.3%. Indexes have been better in Seoul and Shanghai, where stocks rose 0.2%.
AP Business Writer Elaine Kurtenbach contributed.
Original issue: April 21, 2025 9:46am EDT
