US stocks tumbled Monday as investors worldwide became more skeptical about US investments because of President Trump's trade war and his criticism of the Federal Reserve, which are shaking up the traditional order.
- The S&P 500 fell 124.50 points, or 2.4%, to 5,158.20, around 16% below its record set two months ago.
- The Dow Jones Industrial Average fell 971.82 points, or 2.5%, to 38,170.41.
- The Nasdaq composite fell 415.55 points, or 2.6%, to 15,870.90.
Big Tech stocks led the way lower ahead of earnings reports coming this week from Tesla and others. US government bonds and the value of the US dollar also sank, the
AP reports. The dollar fell against the euro, Japanese yen, the Swiss franc, and other currencies.
Tesla sank 6% and closed roughly 50% below its record set in December. Nvidia fell 4.5% in its third straight drop after disclosing that new US export limits on chips to China could hurt its first-quarter results by $5.5 billion. It was the single heaviest weight on the S&P 500. A 1.9% drop for Apple, a 2.4% fall for Microsoft, and a 3.1% slide for Amazon were close behind. The vast majority of stocks in the index fell. Among the few gainers was Discover Financial Services, which climbed after the US government approved its proposed merger with Capital One Financial. Discover rose 3.5%, while Capital One added 1.5%.
Trump continued his tough talk on global trade Sunday, even as economists and investors continue to say his stiff proposed tariffs could cause a recession if they're not rolled back. US talks with Japan have so far failed to reach a deal that could lower tariffs and protect the economy, and they're seen as a "test case," according to Thierry Wizman, a strategist at Macquarie. "The golden rule of negotiating and success: He who has the gold makes the rules," Trump said in an all-caps post on Truth Social. He also said that "the businessmen who criticize tariffs are bad at business, but really bad at politics," likewise in all caps.
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China on Monday warned other countries against making trade deals with the United States "at the expense of China's interest" as Japan, South Korea, and others try to negotiate agreements. "If this happens, China will never accept it and will resolutely take countermeasures in a reciprocal manner," China's Commerce Ministry said in a statement. Also hanging over the market are worries about Trump's anger at Federal Reserve Chair Jerome Powell. A move by Trump to fire Powell would likely send a tremendous bolt of fear through financial markets. While Wall Street loves lower interest rates, in large part because they boost stock prices, the bigger worry would be that a less independent Fed would be less effective at keeping inflation under control in the long run.
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