Wall Street markets cratered again Monday as investors reacted to President Trump’s decision to dial up attacks on Federal Reserve Chairman Jerome H. Powell, even dubbing him a “major loser,” and trade talks faced an uncertain path to success.
Further rattling investors, China on Monday threatened to retaliate against any nation that agrees to isolate Beijing as part of trade negotiations with the U.S., the latest sign of tension between the superpowers as other nations work to cut deals with the Trump administration.
The Dow Jones Industrial Average plummeted more than 900 points, or nearly 2.5%, while the S&P 500 and Nasdaq indexes closed down 2.3% and 2.5%, respectively.
Stocks nose-dived after Mr. Trump, writing on Truth Social, pleaded with the central bank to cut interest rates, pointing to declining prices for eggs and other goods.
“With these costs trending so nicely downward, just what I predicted they would do, there can almost be no inflation, but there can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW,” Mr. Trump wrote, using a recent moniker for Mr. Powell.
Mr. Powell has said that Mr. Trump cannot remove him under the law.
The fight is causing unease for investors, who are simultaneously trying to unpack the fallout from Mr. Trump’s “Liberation Day” trade plan.
The plan imposed a blanket 10% tariff on imports and higher tariffs on nations that sell lots of products to American consumers but don’t buy nearly as much from U.S. producers.
The Chinese Ministry of Commerce issued its warning in response to reports that U.S. negotiators would pressure nations to reduce their economic ties with China in exchange for relief from Mr. Trump’s reciprocal tariffs, which have been paused for 90 days.
“It should be pointed out in particular that China firmly opposes any party reaching a deal at the expense of China’s interests,” the commerce ministry said in a translated statement. “If this happens, China will never accept it and will resolutely take countermeasures in a reciprocal manner.”
The White House says the ball is in China’s court, though Chinese President Xi Jinping seems unwilling to make the first move. His communist government says it doesn’t want a trade war but is willing to fight “to the end.”
“No one can remain immune to the impact of unilateralism and protectionism,” the commerce ministry in Beijing said. “Once international trade returns to the ‘law of the jungle’ where the strong prey on the weak, all countries will become victims.”
Beyond the impact on stocks, the ICE U.S. Dollar Index dropped as low as 97.29 on Monday, its lowest level since 2022.
The index compares the dollar to foreign currencies, and the drop was interpreted as a loss in confidence in the U.S. economy amid trade tensions and attacks on the Fed.
The president thinks lowering interest rates would juice the economy while he conducts trade negotiations and pursues tax cuts with Republicans in Congress.
Vice President J.D. Vance and Indian Prime Minister Narendra Modi finalized a road map for a bilateral trade deal during a meeting in New Delhi on Monday.
India is among dozens of nations that received a 90-day reprieve from Mr. Trump’s hefty reciprocal tariffs because they were willing to sit down with U.S. negotiators.
Italian Prime Minister Giorgia Meloni visited the White House before Easter to represent Italy’s interests and, ostensibly, those of the entire European Union.
The path forward is uncertain. Japanese Prime Minister Shigeru Ishiba told parliament on Monday he would raise concerns about 25% tariffs that Mr. Trump slapped on foreign-made cars even though a 2019 Japan-U.S. trade deal featured assurances there wouldn’t be future car tariffs, according to Reuters.
“Japan has grave concern over the consistency” with regards to the latest U.S. automobile tariffs and the 2019 bilateral trade deal, Mr. Ishiba told parliament.
He also suggested the Japanese side won’t just roll over.
“If Japan concedes everything, we won’t be able to secure our national interest,” Mr. Ishiba said.
