Wall Street Tanks: Trump-Powell Rift and Tariffs Send Dow Down 900 Points

Key Highlights:

• Dow drops over 900 points, S&P 500 sheds 2.3%, Nasdaq down 2.7%
• Trump’s attacks on Fed Chair Powell reignite concerns over central bank independence
• Gold soars past $3,400/oz, USD hits three-year low
• Tech stocks under pressure, Tesla and Nvidia lead losses
• Hertz slides 11% as Ackman-fueled rally fades

Wall Street entered the new trading week with renewed volatility, as investors grappled with a barrage of political uncertainty, global trade tensions, and sharp commentary from the White House. The Dow Jones Industrial Average sank 900 points, closing down 2.3%, while the S&P 500 and Nasdaq fell 2.3% and 2.7%, respectively—one of the worst single-day sell-offs in recent months.

The catalyst? President Donald Trump’s latest public tirade against Federal Reserve Chair Jerome Powell. In a Truth Social post, Trump called Powell “Mr. Too Late, a major loser,” demanding immediate interest rate cuts and raising fresh doubts over the central bank’s independence. Markets responded swiftly, with the U.S. dollar sliding to a three-year low and safe-haven assets like gold surging past $3,400 an ounce.

“Markets are pricing in macro anxiety,” said Adam Crisafulli of Vital Knowledge. “This isn’t just about Powell anymore. It’s about the credibility of U.S. monetary policy in the face of political interference.”

The president’s inflammatory rhetoric comes amid a lack of progress on trade talks with China, further amplifying investor concerns. Beijing has warned countries not to align too closely with Washington, casting a shadow over global trade negotiations.

The combined pressure is weighing heavily on the tech sector. The so-called “Magnificent Seven” stocks, once market darlings, saw a broad sell-off. Tesla tumbled 6%, Nvidia fell 5%, and Meta Platforms slid 3%. The sell-off continued even as Apple and AMD received a minor bump from exemptions on tariffs related to electronics.

Nvidia, in particular, is facing dual headwinds—falling investor confidence and rising competition. Reports that Chinese tech giant Huawei may soon launch its own AI chips add fuel to the fire, as U.S. export restrictions on Nvidia’s H20 chip tighten the squeeze.

Meanwhile, Tesla shares sank ahead of its quarterly earnings due Tuesday, reflecting investor nerves amid a broader market shift away from growth-heavy names. Alphabet and Meta, both set to report soon, are also under the microscope as investors reevaluate the tech landscape.

One standout in the midst of the turmoil was Hertz, though not for the right reasons. After rallying 112% last week following activist investor Bill Ackman’s stake revelation, the rental car company fell back to earth, dropping 11%. Analysts at Bank of America cautioned that while the Pershing Square investment gives Hertz a lifeline, the company may need to raise $500 million or more in capital to stabilize its EV-heavy fleet amid rising depreciation concerns.

“Markets are looking for direction, and they’re getting noise,” said Robert Haworth, senior strategist at U.S. Bank. “Until there’s clarity on rates and tariffs, expect this volatility to persist.”

The pain wasn’t confined to equities. The U.S. Dollar Index (DXY) dropped nearly 1% intraday, its lowest reading since March 2022. Bond markets didn’t offer much relief either, as the 10-year Treasury yield rose to 4.34%, hinting at inflationary fears.

Bitcoin bucked the broader trend, hitting a multi-month high as investors sought refuge in digital assets amid macro chaos. Silver held steady, while copper inched higher on short supply concerns.

Despite the downturn, some investors see a silver lining. A weakening dollar could bolster U.S. export competitiveness, and a potential Fed pivot—if it comes—may provide relief to equity markets in the medium term.

But for now, markets remain on edge. With over 120 S&P 500 companies reporting earnings this week—including Tesla and Alphabet—the next few days will be pivotal in setting the tone for the rest of the quarter.