Wall St tumbles as Trump ramps up tirade against Fed's Powell

NEW YORK: US stocks suffered steep losses on Monday as US President Donald Trump ramped up his attacks on Federal Reserve Chair Jerome Powell, prompting investors to worry about the central bank's independence even as they grapple with the effects of Trump's ongoing, erratic trade war.

All three major indexes tumbled more than 2%, with steep losses in the "Magnificent Seven" group of megacap growth stocks weighing heaviest on the tech-heavy Nasdaq.

If the S&P 500 closes at 20% or below its June 19 record closing high, that will confirm the index entered a bear market on that date. The bellwether index is 17% below that level.

Trump escalated his criticism of Powell on Monday, saying the US economy is headed for a slowdown "unless Mr. Too Late, a major loser, lowers interest rates NOW," in a bellicose Truth Social post which raised concerns over the Fed's autonomy.

"The latest headline du jour is Trump is unhappy with Powell's performance, and it is creating more uncertainty ... in a weak environment," said Adam Sarhan, chief executive of 50 Park Investments in New York.

"The fact that we're down so much today after a long weekend tells me, OK, investors went into the weekend, they looked at the situation, and they see more uncertainty, not less uncertainty," Sarhan added. "Clearly investors are spooked, and fear is taking over."

The Sino-US trade rift deepened after Beijing warned other countries against striking deals with the United States at China's expense, adding fuel to the spiraling tariff war between the world's two largest economies.

The Dow Jones Industrial Average .DJI fell 1,244.72 points, or 3.19%, to 37,897.51. The S&P 500 .SPX lost 172.69 points, or 3.27%, at 5,110.12 and the Nasdaq Composite .IXICfell 566.85 points, or 3.48%, to 15,719.60.

All 11 major sectors in the S&P 500 were in negative territory, with consumer discretionary .SPLRCD and tech .SPLRCT suffering the biggest percentage losses.

First-quarter earnings season shifts into higher gear this week with dozens of closely watched firms due to report. So far, of the 59 companies that have reported, 68% have beaten Wall Street expectations, according to LSEG data.

As of Thursday, analysts expect aggregate first-quarter S&P 500 earnings growth of 8.1%, year-on-year, down from the 12.2% growth projected at the beginning of the quarter, per LSEG.

Notable earnings on the docket this week include Magnificent Seven members Tesla TSLA.O and Alphabet GOOGL.O, and a host of high-profile industrials including Boeing BA.N, Northrop Grumman NOC.N, Lockheed Martin LMT.N and 3M MMM.N.

Artificial intelligence heavyweight NvidiaNVDA.O dropped 6.1% after Reuters reported that Huawei Technologies planned to begin mass shipments of an advanced AI chip to customers in China as early as next month.

FIS FIS.N gained 2.7% after a brokerage upgrade.

Declining issues outnumbered advancers by a 6.53-to-1 ratio on the NYSE. There were 70 new highs and 151 new lows on the NYSE.

On the Nasdaq, 1,022 stocks rose and 3,324 fell as declining issues outnumbered advancers by a 3.25-to-1 ratio.

The S&P 500 posted one new 52-week high and nine new lows while the Nasdaq Composite recorded 27 new highs and 168 new lows.