Market Declines as President Trump Considers Firing Fed Chair Powell

The S&P 500 Index ($SPX) (SPY) has decreased by -1.37%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -1.23%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -1.59%. Additionally, June E-mini S&P futures (ESM25) and June E-mini Nasdaq futures (NQM25) have fallen -1.33% and -1.50%, respectively.

Stock indexes are showing moderate declines, with the S&P 500, Dow Jones, and Nasdaq 100 reaching 1-week lows. Today, both stocks and the dollar are retreating as the sell-America sentiment intensifies. President Trump is reportedly considering the dismissal of Fed Chair Powell, which has contributed to the market’s downward trend.

This selling pressure escalated following remarks from National Economic Council Director Hassett. He indicated that the President has inquired about potentially replacing Powell due to his decisions on interest rates. Consequently, the dollar has dropped to a 3-year low, while gold has surged to a new record high, as fears of Powell’s removal undermine confidence in the dollar and could lead foreign investors to offload dollar-denominated assets, including stocks and Treasuries.

Bitcoin (^BTCUSD) has gained more than +3%, reaching a 2-1/2 week high. The dollar’s slump fuels demand for cryptocurrencies as Trump’s remarks about Powell raise concerns regarding the Federal Reserve’s independence.

The market is pricing a 14% likelihood of a -25 basis points rate cut following the May 6-7 FOMC meeting.

This week, the market is focused on Q1 corporate earnings results and potential changes in U.S. trade policies. New home sales for March are expected to increase by +0.7% month-over-month to 681,000. Additionally, the Fed’s Beige Book will also be published on Wednesday. On Thursday, March capital goods orders excluding defense and aircraft are projected to see a +0.1% month-over-month increase. Moreover, existing home sales are anticipated to fall -2.8% month-over-month to 4.14 million.

The Q1 earnings reporting season is in full swing. Data from Bloomberg Intelligence indicates a market consensus for Q1 year-over-year earnings growth of +6.7% for S&P 500 companies, a cut from earlier projections of +11.1% in November. For the full year of 2025, corporate profits for the S&P 500 are expected to rise +9.4%, a decline from the earlier forecast of +12.5% made in January. On Friday, the revised University of Michigan’s April consumer sentiment index is expected to remain unchanged at 50.8.

Global Market Overview

Internationally, stock markets are mixed today. The Euro Stoxx 50 is closed for the Easter Monday holiday. Meanwhile, China’s Shanghai Composite Index has risen to a 2-week high, closing up +0.45%. In contrast, Japan’s Nikkei Stock 225 wrapped up down by -1.30%.

Trade Developments

On April 4, President Trump announced a temporary exemption from reciprocal tariffs for consumer electronics, while a 20% tariff on electronics from China remains in effect. Furthermore, on April 9, a 90-day delay was confirmed on higher reciprocal tariffs for 56 nations, maintaining the baseline 10% tariffs. The EU has similarly delayed implementing 25% tariffs on €21 billion worth of U.S. goods for 90 days.

Previously, on March 4, tariffs of 25% were imposed on Canadian and Mexican goods, and tariffs on Chinese goods increased to 20%. Additionally, a proclamation signed on April 2 set a 25% tariff on U.S. auto imports, initially targeting fully assembled vehicles from outside the U.S. and later expanding to include auto parts. Concurrently, a 10% baseline tariff took effect on April 5.

In retaliation, China raised tariffs on all U.S. goods to 125%. This escalation worsens trade tensions after a series of airline directives regarding Boeing jets and restrictions on Nvidia chip sales to China.

Interest Rates

June 10-year T-notes (ZNM25) have declined by -9 ticks today, with the 10-year T-note yield rising +5.1 basis points to 4.375%. The drop in T-notes can be attributed to the uncertainty regarding Fed Chair Powell’s potential removal, which jeopardizes the Fed’s independence and confidence in the dollar while potentially triggering foreign sell-offs of dollar assets, including Treasuries. Additionally, the Treasury is set to auction $213 billion in T-notes and floating-rate notes this week, starting with a $69 billion auction for 2-year T-notes.

European bond markets are closed today due to the Easter Monday holiday. On Thursday, the 10-year German bund yield fell to a 1.5-week low of 2.452% and ended down -3.7 basis points. The 10-year UK gilt yield also dropped to a 1.5-week low and closed lower by -3.7 basis points.

The ECB’s Governing Council member Muller has indicated that U.S. trade tariffs and increased public spending in Germany pose risks to inflation, while swaps are currently predicting a 92% chance of a -25 basis points rate cut in the upcoming June 5 policy meeting.

U.S. Stock Movers

The Magnificent Seven stocks are facing pressures today, impacting the broader market. Tesla (TSLA) has seen a drop of over -6%, while Nvidia (NVDA) and Amazon.com (AMZN) are down more than -4% and -3%, respectively. Additionally, Apple (AAPL), Alphabet (GOOGL), and Meta Platforms (META) have declined more than -2%, and Microsoft (MSFT) is down over -1%.

Chip stocks have also fallen, with Marvell Technology showing a decrease of over -4%. Other notable declines include Advanced Micro Devices (AMD), Broadcom (AVGO), and Micron Technology (MU), all dropping more than -2%.

Energy producers are struggling today, as WTI crude prices have fallen by more than -2%. Consequently, stocks like APA Corp (APA) and Diamondback Energy (FANG) are down over -5% and -4%, respectively, along with Devon Energy (DVN) and Occidental Petroleum (OXY), which are both down over -3%.

In contrast, gold-mining stocks are experiencing gains today, with the price of gold reaching a new all-time high. As a result, Anglogold (AU) has risen more than +2%, and Newmont (NEM) is up over +1%.

Health insurance stocks continue to fall following UnitedHealth Group’s earnings outlook reduction last Thursday. Consequently, United Health Services (UHS) has decreased over -4%, while Humana (HUM) and UnitedHealth Group (UNH) have both dropped more than -3%.

Salesforce (CRM) is down more than -3% after a downgrade by D.A. Davidson from neutral to underperform, with a new price target of $200. Similarly, DR Horton (DHI) saw a decline of over -2% after CFRA downgraded its rating from hold to sell, with a price target of $109.

On the upside, Fidelity National Information (FIS) has gained more than +4% after TD Cowen upgraded the stock to buy from hold, with a target price of $92. Discover Financial Services (DFS) is also up over +4% following regulatory approval of Capital One Financial’s acquisition of Discover. Furthermore, Netflix (NFLX) is leading Nasdaq 100 gains, rising over +2% after reporting Q2 revenue of $11.04 billion, exceeding consensus estimates of $10.88 billion.

Lastly, Capital One Financial (COF) has seen a rise of more than +2% after receiving approval for the purchase of Discover Financial Services.

Earnings Reports (4/21/2025)

Companies reporting earnings include AGNC Investment Corp (AGNC), BOK Financial Corp (BOKF), Comerica Inc (CMA), Equity LifeStyle Properties Inc (ELS), Hexcel Corp (HXL), Medpace Holdings Inc (MEDP), W R Berkley Corp (WRB), Western Alliance Bancorp (WAL), Wintrust Financial Corp (WTFC), and Zions Bancorp NA (ZION).

On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.