United States
Selling resumed on US indices as traders returned from the Easter break, spurred by renewed political pressure on the Federal Reserve. A series of social media posts from former President Trump targeted Fed Chair Jerome Powell, referring to him as “Mr Too Late, a major loser,” and demanded an immediate interest rate cut to avoid an economic slowdown. These comments, along with reports that administration officials were exploring ways to remove Powell from his position, raised concerns over the independence of the central bank and triggered a broad market sell-off.
The sell-off was widespread across asset classes, with equities and the US dollar falling, while bond yields moved higher. The Dow Jones Industrial Average dropped 971 points, or 2.48%, to close at 38,170. The Nasdaq Composite fell 415 points, or 2.55%, to 15,870.90, and the S&P 500 declined 124 points, or 2.36%, to finish at 5,158. All eleven sectors in the S&P 500 ended the day lower, with technology and consumer discretionary stocks leading the declines.
Technology stocks were particularly hard hit, with the “Magnificent Seven” index falling 3%. Nvidia lost 4.51% to close at $96.91 after reports emerged that China’s Huawei Technologies is preparing to begin large-scale shipments of its advanced AI chips—theses chips may fill the void created by US export restrictions on Nvidia products. Tesla shares fell 5.75% following a downgrade from analysts and reports that the production of its long-anticipated lower-cost model would be delayed. The company is scheduled to report earnings on Tuesday.
Other major tech names also declined, with Apple down 1.94% and Meta falling 3.35%, despite President Trump’s reassurances that tariff negotiations with China were progressing. However, China intensified its rhetoric, warning other nations against entering trade deals with the US that could disadvantage China.
In the bond market, yields surged, with the 10-year Treasury rising 9 basis points to 4.41% and the 30-year gaining 10 basis points to 4.90%. The US dollar weakened, with the Bloomberg Dollar Index falling 0.70%. Michael Brown, an analyst at Pepperstone, remarked, “Not only is the independence of the Fed clearly under threat, but the prospect of de-dollarisation and a shift away from US hegemony is becoming increasingly realistic.”
Looking ahead, the earnings season continues this week with key reports expected from Alphabet (Google), Tesla, Boeing, 3M, and others.
Europe
European markets were closed on Friday and Monday for the Easter holidays. Last Thursday, the European Central Bank cut its deposit rate by 25 basis points to 2.25%—marking its seventh reduction since June last year. The Stoxx Europe 600 finished Thursday little changed, as investors weighed the benefits of looser monetary policy against a more cautious economic outlook. ECB President Christine Lagarde warned that downside risks to growth had intensified amid ongoing trade headwinds and rising global uncertainty.
Australia
Australian markets were also closed on Friday and Monday for the Easter break, with futures trading ending at midnight on Thursday. The sharp decline in US equity markets to start the week is expected to be reflected in a weaker open for the ASX200 today. Meanwhile, the Australian dollar strengthened against the US dollar, with the AUD/US$ rising 0.65% to open Tuesday at 0.6421, supported by broad weakness in the greenback.
Commodities
Gold surged once again as safe haven buying and a weaker US dollar drove strong demand. The precious metal jumped 2.9%, closing at US$3,423.98—an increase of US$97.13. Momentum to the upside has been notable, although some analysts are warning that the market may be due for a slowdown or even a short-term pullback. Despite these concerns, demand via gold ETFs remains robust.
Silver also gained, finishing the session at US$32.70. Bitcoin climbed 2.6% from Thursday’s close to end the day at US$87,354.
In contrast, oil prices fell as broader market sentiment turned risk-off. West Texas Intermediate (WTI) declined 2.47% to US$63.08, down US$ 1.60, while Brent Crude dropped 2.10% to US$66.53. The pullback was driven in part by comments from the US administration, which dampened investor sentiment, as well as easing supply concerns. Iran’s foreign minister noted that the country had reached a “better understanding” with the US on key principles amid ongoing nuclear negotiations.
Trading volumes across commodities were lighter than usual, with many markets closed for Easter observance.
Iron ore slipped 0.50%, falling 51 cents to US$98.85. Copper did not trade on the London Metal Exchange due to the holiday but edged 0.22% lower in light trading on the COMEX in New York. In related news, a mining project in Arizona—jointly developed by BHP and Rio Tinto—was granted “expedited permitting status” by US authorities. The move follows an executive order issued earlier this year aimed at accelerating domestic mineral production and reducing reliance on foreign sources.
Economic Calendar
US:
- Richmond Fed Manufacturing Index (Apr) – 1:00am
This article was written by Paul Darwell, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
