S&P 500 and Nasdaq Index: Trump Slams Powell as Tesla, Nvidia, and Amazon Lead Stock Selloff

Stocks Drop Sharply as Trump Targets Fed Chair Powell, Fuels Market Anxiety

U.S. markets slid Monday after former President Donald Trump escalated his criticism of Federal Reserve Chair Jerome Powell, calling him “Mr. Too Late” and demanding immediate rate cuts. The comments intensified concerns over Fed independence and added to investor unease stemming from prolonged global trade disputes. The S&P 500 sank 2%, while gold surged past $3,400 as traders sought safety.

How Did Trump’s Comments Hit Market Confidence?

Trump’s outburst, posted on Truth Social, warned of economic slowdown without swift monetary easing, despite what he described as “virtually No Inflation.” Reports that the White House is exploring legal paths to remove Powell before his term ends have rattled investors, raising fears of political interference in central banking. With the Fed still cautious due to tariff-driven inflation risks, Powell is caught between policy patience and growing external pressure.

Which Sectors Took the Hardest Hit?

Tech bore the brunt of the selloff. The Nasdaq dropped nearly 10% since early April, dragged down by the “Magnificent Seven.” Tesla plunged 7% ahead of earnings, Nvidia and Amazon slid 5% and 4% respectively, and the Roundhill Magnificent Seven ETF lost 3.3%. Tesla’s decline reflects broader concerns about CEO Elon Musk’s divided attention and vulnerability to tariff disruptions in its supply chains.

Caterpillar fell 3%, indicating pressure on industrials from trade-related uncertainty. Hertz tumbled 12% despite activist investor Bill Ackman’s recent 19.8% stake, as analysts questioned the company’s financial footing amid auto tariff threats.

How Are Trade Woes Amplifying Market Pressure?

Persistent lack of clarity on trade policy, especially with China, continues to weigh heavily. U.S. Bank’s Robert Haworth noted that prolonged uncertainty hampers corporate decision-making and earnings visibility. China’s warnings to global partners about deals with the U.S. suggest tensions could escalate further, compounding investor apprehension.

What’s the Market Outlook Heading Into the Week?

With Powell’s position under scrutiny and trade negotiations stalled, traders face a tough road ahead. Tesla’s earnings tomorrow could add another catalyst. Analysts caution that the erosion of central bank credibility could spark longer-term selloffs across assets. A firm policy stance from the Fed or a shift in trade dialogue will be critical to restoring stability in the short term.

More Information in our Economic Calendar.