Catenaa, Monday, April 21, 2025- The US stock market declined on Monday after President Donald Trump warned of economic slowdown unless the Federal Reserve cuts interest rates.
“With these costs trending so nicely downward, just what I predicted they would do, there can almost be no inflation, but there can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW,” Trump said in a post on Truth Social.
US stocks, which already opened down over investor worries with attacks on Fed Chair Jerome Powell, slid further after Trump’s post on Truth Social.
S&P 500 was down by 2%, Dow Jones Industrial Average by 1.9% and Nasdaq by 2.3%.
Tesla was among the top losers ahead of its earnings report release on Tuesday with the stock down by 6.4% within the first two hours of trading on Monday, Nvidia stock was down by 5.15%.
The Fed’s wait-and-see approach on interest rates has angered Trump. On Friday a Trump adviser said the administration is studying options for firing Powell, fueling concerns about the central bank’s autonomy and rattling investors grappling with an intensifying trade war.
The President does not have the power to fire Powell, but this is still adding to the fear and uncertainty on Wall Street.
Sen. Elizabeth Warren said that the stock market would crash if Jerome Powell were fired. The firing is unlikely, but the risks are definitely being priced in.
The fact that the president acknowledged a slowdown could lead to market sentiment getting even more bearish since the Federal Reserve has shown no sign of doing a rate cut anytime soon.
