Topline
American financial markets struggled across the board Monday as President Donald Trump’s trade war and confrontation with the top U.S. central banker showed little signs of slowing down, sending stocks lower, bond yields higher and the dollar to a multiyear low.
Trump’s nascent second term has been marred by stock market choppiness. Pictured is a trader working … More
Key Facts
All three major U.S. indexes slipped Monday as the Dow Jones Industrial Average fell 2.5%, or 970 points, the S&P 500 declined 2.4% and the tech-heavy Nasdaq dropped 2.6%.
Also struggling Monday were bonds, as yields for longer-dated U.S. bonds spiked, signaling reluctance to hold government debt (higher yields mean less valuable bonds).
Yields for the benchmark 10-year Treasury note rose eight basis points to 4.4%, the highest level since last Monday, while yields for 30-year bonds climbed 10 basis points to more than 4.9%, also the highest level since last Monday.
The U.S. Dollar Index (DXY) fell 1% to 98, putting the dollar at its weakest level compared to other major currencies since March 2022, with the latest dollar deterioration coming as Trump intensifies his attacks on Federal Reserve Chairman Jerome Powell.
Trump’s flirtation with firing Powell should be “taken very seriously and very negatively,” said Win Thin, global head of markets strategy at Brown Brothers Harriman & Co., according to Bloomberg.
Trump called Powell a “major loser” in a Monday morning post to the president’s Truth Social site, again demanding interest rate cuts as he tests the limits of the Fed’s historic operational independence from the Oval Office.
Chief Critic
Trump’s toying with ousting Powell stands on shaky legal footing and, as a potential historic first, it is far from unanimously supported amongst Republican leaders. “I don’t think the president, any president, has the right to remove the Federal Reserve chairman,” Sen. John Kennedy, R-La., told NBC’s “Meet The Press” on Sunday, continuing: “I think the Federal Reserve ought to be independent. I think that Jay Powell and President Trump need to sit down and, once again, have a hug and a cup of hot cocoa and work it out.”
Crucial Quote
“The open question is how to accurately quantify the effect on asset class prices before the dust settles and the extent of tariffs levied against trading partners is actually established,” Oppenheimer’s chief investment strategist John Stoltzfus wrote in a Monday note to clients.
Apple, Nvidia And Tesla Lead Big Tech Slide
Shares of all seven “magnificent seven” big technology stocks – Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla – were in the red Monday as the group continues to be crushed by the tariff selloff. Apple and Nvidia stocks fell 2% and 5%, respectively, as both companies with heavy China exposure grappled with worrisome reports about market share in the Asian country. Shares of Tesla slid 6% as Elon Musk’s electric vehicle maker prepares to report first-quarter earnings Tuesday afternoon. Consensus analyst forecasts call for Tesla to disclose its worst quarterly profit since 2021’s first quarter, according to FactSet.
But Gold And Bitcoin Surge
Monday was a strong day for the world’s largest cryptocurrency bitcoin and the world’s top safe haven gold as investors searched for places to park their capital as the dollar, U.S. stocks and U.S. bonds simultaneously tanked. Gold prices rose more than 3% on Monday to a record of more than $3,430 per troy ounce, extending its year-to-date gain to more than 25%, while bitcoin prices rose 4% in the 24-hour period ending at 9:45 a.m. to nearly $88,000, the digital asset’s top level since March.
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