Stocks and dollar fall as Trump's Fed attacks jangle nerves
Asian equities and U.S. stock futures slid on Monday as anxiety over tariffs and public criticism of the Federal Reserve by President Donald Trump hit sentiment, pushing the dollar down sharply and catapulting safe-haven gold to a record high.
Trump launched a series of attacks against Fed Chair Jerome Powell on Thursday, with his team evaluating whether they could fire Powell, a move that has great consequence for the central bank's independence and for global markets.
Most markets were closed on Friday and some, including most of Europe, remain on holiday for Easter Monday.
S&P 500 futures fell 0.64% and Nasdaq futures eased 0.53%. In Asia, Japan's Nikkei fell more than 1% while South Korea's benchmark index was steady. Taiwan stocks slipped 1% but China stocks inched higher on Monday. "Markets are already on edge due to escalating geopolitical tensions, and now concerns are rising that Trump's potential interference with the Fed could add another layer of uncertainty," said Charu Chanana, chief investment strategist at Saxo in Singapore. "Any signs of political pressure on monetary policy could undermine the Fed’s independence and complicate the path ahead for interest rates just as investors are looking for stability amid global volatility." Trump's tariffs have roiled financial markets and triggered a selloff in Treasuries and the dollar in April that cast fresh doubt on the long-held belief in the safe-haven status of U.S. assets. The drop in confidence in U.S. assets has been exacerbated by Trump's attacks on the Fed, with the dollar crumbling against most other currencies. The euro touched a three-year high on Monday, while the yen was at a seven-month peak. The Swiss franc strengthened to its highest against the dollar in over 10 years. Emerging market currencies also nudged higher as dollar selling intensified through Monday. [FRX/] Chicago Federal Reserve President Austan Goolsbee said on Sunday that he hopes the United States is not moving to an environment where the ability of the central bank to set monetary policy independent of political pressure is questioned. The yield on the benchmark U.S. 10-year Treasury note rose 1.7 basis points to 4.344% in Asian hours. U.S. EARNINGS IN FOCUS With the U.S. earnings season kicking off, investor focus this week will be on results from tech bellwether Alphabet, chipmaker Intel and EV maker Tesla. All the 'Magnificent Seven' megacap stocks are sharply lower in 2025, with Alphabet down about 20% and Tesla off 40%. Companies and investors are grappling with a tariff landscape poised to keep shifting as the Trump administration negotiates with countries. While Trump has paused some of the heftiest levies on imports, the U.S. is also locked in a trade battle with China, the world's second-largest economy. Trump said on Friday the U.S. is having good conversations privately with China amid the two countries' trade war. But China's ambassador to the United States has said the U.S. should show respect before any talks can take place. In commodities, gold prices rose more than 1% to touch a record high of $3,370.17 per ounce, taking its gains so far this year to 26%. The metal has been consistently hitting record highs this year, buoyed by safe-haven flows.
Oil prices fell 1.80% on Monday after nuclear talks between the United States and Iran showed progress, easing concerns that the dispute will reduce supply from the major Middle Eastern producer.
Brent crude futures fell 1.75% to $66.77 a barrel. U.S. West Texas Intermediate crude was at $63.55 per barrel, also down 1.75%. [O/R]
