Wall Street closed sharply lower Monday in another rout fueled by political pressure on the Fed and mounting trade tensions. The Dow Jones Industrial Average fell nearly 1,000 points, down 2.48%. The S&P 500 slid 2.36%, while the tech-heavy Nasdaq Composite lost 2.46%.
Markets turned south within minutes of the opening bell after President Donald Trump launched a fresh attack on Federal Reserve Chair Jerome Powell, calling him “Mr. Too Late” and “a major loser,” and warning that failure to cut rates immediately risked pushing the U.S. into recession.
“Preemptive Cuts” in interest rates are being called for by many,” Trump wrote on Truth Social. “With Energy Costs way down, food prices (including Biden’s egg disaster!) substantially lower, and most other ‘things’ trending down, there is virtually No Inflation.”
“There can almost be no inflation,” he added, “but there can be a SLOWING of the economy unless Mr. Too Late… lowers interest rates, NOW.”
Over the weekend, Trump had floated the idea of removing Powell before his term ends in 2026 — a possibility White House economic adviser Kevin Hassett confirmed Monday was “under review.”
The dollar dropped and safe-haven assets rallied as investors digested the White House’s pressure on the Fed. The ICE U.S. Dollar Index slipped to 98.37, its lowest level since March 2022. Gold surged above $3,400 an ounce to a new nominal high, while 10-year Treasury yields climbed to 4.4% as government bonds sold off.
Tesla led major decliners, falling 5.7% on fears tariffs could disrupt its supply chain. Nvidia lost 4.4%, Amazon and Meta were down just over 3%, and Caterpillar — a proxy for the broader industrial economy — dropped nearly 3%.
Trade tensions with Beijing added to the selloff. Earlier this month, the White House rolled out a tiered tariff system from 10% to 49%, aimed at countries with large trade surpluses against the U.S.. After a dramatic market drop, the plan was replaced with a flat 10% tariff across all partners for 90 days — except China.
Beijing, which has faced a 145% duty since April 9, responded with sweeping countermeasures, imposing a 125% tariff on nearly all U.S. imports. On Monday, China’s Commerce Ministry warned other nations against reaching trade deals that would harm Chinese interests.
“China firmly opposes any party reaching an agreement at the expense of China’s interests,” the ministry said. “If international trade reverts to the law of the jungle… eventually all countries will become victims.”
Since April 2 — the day Trump announced the tariffs, branding it “Liberation Day” — the S&P 500 has dropped more than 8%, the Nasdaq nearly 10%, and the Dow about 9%.
