The Dow Jones Industrial Average (DJIA) plunged over 1,000 points, marking a 3% drop that pushed it below the 38,000 level for the fourth time in April. This continued selloff reflects deepening concerns among investors over political interference with monetary policy, particularly after President Donald Trump intensified his verbal attacks on Federal Reserve Chair Jerome Powell. The uncertainty surrounding the Fed’s independence has added to the mounting unease in financial markets.
Trump’s Criticism of Powell Stirs Fed Concerns as Tech Stocks Suffer Major Losses
President Trump’s criticism of Jerome Powell, labeling him a “major loser,” has raised alarms about the potential erosion of the Federal Reserve’s autonomy. Despite the criticism, Powell remained composed, reiterating the Fed’s commitment to a data-driven approach. He also warned about the possible emergence of a stagflationary scenario, highlighting the complexity of balancing inflation control with employment growth—two core goals of the Fed’s dual mandate.
Dow Tumbles Below 38000 as Trump’s Fed Attacks Fuel Market Turmoil and Tech Stock SelloffThe DJIA wasn’t alone in the downturn, as the S&P 500 and Nasdaq both fell significantly, declining by 3.16% and 3.44%, respectively. The tech sector was particularly hard-hit, with high-profile companies like Tesla and Nvidia suffering steep losses of 7% and 6%. This deepening rout in mega-cap tech stocks underscores a broader risk-off sentiment, with investors retreating from growth-oriented equities amid policy and economic uncertainty.
US Dollar Sinks Amid Policy Doubts as Dow Faces Persistent Bearish Pressure
Investor sentiment also turned against the US dollar, as confidence in American economic leadership waned. The US Dollar Index (DXY), which measures the greenback’s performance against a basket of six major currencies, fell over 1%, touching a three-year low of 97.92 before slightly recovering to 98.27. This decline reflects global concerns about US fiscal and trade policy direction, as well as the perceived instability in the central bank’s decision-making process.
The near-term outlook for the Dow remains bearish as it continues a four-day losing streak, with sellers eyeing the year-to-date low of 36,614 reached earlier in April. For bears to maintain control, the index needs to stay below the 38,000 level.
However, if bulls can regain momentum and push the DJIA back above 38,000, they could challenge resistance at 38,431 and potentially retest the 39,000 mark. Meanwhile, markets are increasingly pricing in a significant shift in Fed policy, with expectations of nearly a full percentage point of rate cuts by the end of 2025.