JAKARTA – The US stock market faced significant pressure on Monday (April 21) following President Donald Trump’s criticism of Federal Reserve Chairman Jerome Powell.

As quoted by CNN on Thursday (April 17), Trump attacked Powell through a social media post, mocking the Federal Reserve (The Fed) leader for failing to cut interest rates and claiming that the US is lagging behind European central banks.

“Jerome Powell of The Fed, who is always late and wrong, yesterday released a report that, as usual, was completely chaotic! Can’t wait for Powell to be fired,” Trump wrote.

As of 12:08 AM WIB, the Dow Jones Industrial Average dropped 1,161 points (around 2.97%), while the S&P 500 and Nasdaq Composite fell 2.7% and 3%, respectively.

Major tech stocks like Tesla and Nvidia experienced significant corrections, with declines of 7% and 5%, respectively. Amazon’s stock also fell 4%, followed by drops in Meta Platforms and Advanced Micro Devices (AMD) of 3%.

Trump even hinted at the possibility of firing Powell, a move that could threaten the credibility of the US central bank.

The impact of Trump’s remarks was evident in the market. The US dollar index fell to its lowest level in three years, while gold prices surged to a record high, reaching $3,400 per ounce.

Tech and manufacturing stocks were under pressure as investors shifted to safe-haven assets amid global economic uncertainty.

Notably, tensions between the White House and The Fed have added risks to the US economy, which is already facing a slowdown due to protectionist trade policies.

Previously, strategists at JPMorgan Chase & Co., the largest investment bank in the US, warned that the risk of recession due to the trade war has not been fully reflected.

Historically, during the last five recessions, the S&P 500 fell an average of 37% from peak to trough, with the forward price-to-earnings (P/E) ratio dropping to 12x. In contrast, current valuation multiples remain high, suggesting that stocks still have more room for adjustment. (DK/LM)