Background on Key Figures and Institutions
On Monday, former U.S. President Donald Trump escalated his criticism of Jerome Powell, the current Chair of the Federal Reserve (Fed). This criticism has raised concerns among investors about the independence of the central bank.
Jerome Powell has been leading the Fed since 2018, earning recognition for his balanced approach in complex scenarios such as the pandemic and recent inflation. His criticism by Trump has sparked significant worries about the Fed’s autonomy.
Jed Ellerbroek, a portfolio manager at Argent Capital Management, emphasized the importance of an independent central bank: “Countries with an independent central bank experience faster growth, lower inflation, and better economic outcomes for their populations. Political attempts to influence the Fed are a very bad idea.”
Market Performance and Key Players
Major U.S. stock market indices experienced substantial declines on Monday, reflecting investor nervousness following Trump’s attacks on Powell.
- Dow Jones Industrial Average: Fell 2.48% to 38,170.41 points.
- S&P 500: Dropped 2.36% to 5,158.20 points.
- Nasdaq Composite: Declined 2.55% to 15,870.90 points.
Trump’s criticism of Powell intensified on Monday, urging him to lower interest rates “NOW” or face an economic slowdown in the U.S., as per a message on his Truth Social platform.
Impact on Technology Sector
The technology sector, specifically the seven leading growth companies with significant market capitalization known as the “Seven Magnificent,” experienced notable losses. These included:
- Apple: The most valuable company saw a nearly 2% drop in its stock price.
- Nvidia: A major player in artificial intelligence, experienced a 4.51% decline.
Trade Tensions Between China and the U.S.
Investor concerns over trade disputes between China and the U.S. deepened after China warned against prioritizing deals with the U.S. over China, intensifying the ongoing tariff war between the world’s two largest economies.
