US stock markets have started the week on a shaky footing, with futures for the S&P 500, Nasdaq 100, and Dow Jones all pointing clearly downward. A mix of political tension, fears over trade relations and concerns about the Federal Reserve’s independence have rattled investors, prompting a shift towards traditional safe-haven assets.
Trump Targets Powell in High-Stakes Power Play
President Donald Trump has once again clashed with the US Federal Reserve, this time ramping up the pressure in a more serious fashion. Reports suggest the White House is considering removing Fed Chair Jerome Powell, a move that would raise significant concerns over the central bank’s independence.
The motive? Trump is believed to be pushing aggressively for interest rate cuts in a bid to support the economy – and he may be prepared to force a leadership change to achieve that. The mere suggestion of such a step has sent shockwaves through the markets, highlighting deepening political interference in monetary policy.
In pre-market trading, the Dow Jones future dropped 0.9%, the S&P 500 fell by 1%, and the Nasdaq 100 slipped 1.1%. The growing mistrust in the Fed’s independence is adding fuel to an already tense market environment.
China Fires Back Amid Rising Trade Tensions
On the global stage, US-China trade tensions are once again flaring up. Beijing’s Ministry of Commerce stated on Monday that China would not accept any agreement that undermines its core interests. This was seen as a direct response to Washington’s efforts to win over other nations to its economic stance.
China also warned of potential countermeasures against countries that fail to remain neutral, escalating the geopolitical stakes. Investors are increasingly worried about the implications of rising trade barriers for global economic growth.
Investors Flee to Safe Havens: Gold Soars, Oil Slips
As equities come under pressure, traditional safe havens are surging. Gold prices have jumped to a new all-time high of $3,406 per ounce, marking a 2.3% increase. Meanwhile, the WSJ Dollar Index has dropped to its lowest level in over a year, reflecting a broader loss of confidence in the US dollar.
Oil prices are also sliding, with Brent crude down 1.5% and WTI falling 1.6%. The decline is driven by fears that Trump’s trade policies, particularly tariffs, could hinder global growth and reduce energy demand.
Company Shares React Sharply to Market Turmoil
The broader uncertainty is also impacting individual stocks. Tesla shares are down 3.7% in pre-market trading amid speculation about potential delays to the rollout of its more affordable Model Y vehicle. Adding to the pressure, Barclays has lowered its price target for Tesla from $325 to $275.
In contrast, Netflix shares are up 2.9% following better-than-expected quarterly earnings. The streaming giant not only beat profit forecasts but also issued a stronger outlook for the current quarter. However, for the first time, Netflix did not disclose its updated user figures, a notable shift in its reporting.
UnitedHealth remains under strain after last week’s 22% drop. The stock has lost an additional 0.5%, driven by higher costs in its Medicare division and a downward revision of its annual earnings forecast.
Key Corporate Reports Ahead
The earnings season is now in full swing, with several major players set to release their quarterly results in the coming days. Companies on the schedule include Alphabet, IBM, Tesla, AT&T, GE, Lockheed Martin, PepsiCo, Procter & Gamble, Intel, Merck, and AbbVie.
Given the volatile market environment, investors will be paying close attention not only to reported figures but also to the forward guidance these firms provide. Their outlooks could significantly influence short-term sentiment across the financial markets.
