US stock futures fall as Trump escalates attacks on Fed Chair Powell

WASHINGTON: US stock index futures dropped on Monday, as President Donald Trump’s attacks on Federal Reserve Chair Jerome Powell sparked worries about the central bank’s independence, rattling investors already grappling with an escalating trade war.

On Friday, White House economic adviser Kevin Hassett said that Trump and his team would study whether firing the Fed Chair was an option.

That followed Trump’s comments on Thursday that Powell’s “termination cannot come fast enough,” as the President renewed his calls for more interest-rate cuts.

The continued attacks on Powell increased worries about the Fed’s independence in deciding the path of monetary policy in the world’s largest economy, hitting investor confidence in US assets already diminished by Trump’s sweeping changes to trade policy.

“While monetary policy is a relatively blunt weapon, it can be wielded to control medium-term inflation. This depends on trust in the central bank,” said Paul Donovan, chief economist, UBS Global Wealth Management.

“Building that trust takes years. Losing that trust can happen overnight.”

At 06:48 am ET, Dow E-minis 1YMcv1 were down 344 points, or 0.87 per cent, S&P 500 E-minis EScv1 were down 53.75 points, or 1.01 per cent, and Nasdaq 100 E-minis NQcv1 were down 209.25 points, or 1.14 per cent.

Futures linked to the small-cap Russell 2000 RTYcv1 lost 0.8 per cent, while the CBOE Volatility Index – Wall Street’s “fear gauge” – rose more than 2.5 points.

Trading volumes were relatively thin as investors returned from the Good Friday market holiday. The dollar slid against major peers and safe-haven gold XAU.

Gold miners were higher in premarket trading, with Newmont rising 2.8 per cent and US-listed shares of Barrick Gold up 3.6 per cent.

Most megacap and growth stocks were lower. Tesla fell 2.5 per cent after a Reuters report said the launch of the EV-maker’s cheaper Model Y car was delayed.

Nvidia was last down 3.2 per cent after Reuters reportedthat Huawei Technologies planned to begin mass shipments of an advanced AI chip to Chinese customers as early as next month.

Traders are now pricing in nearly a full percentage point of rate cuts from the Fed this year, according to LSEG data.

Tariff concerns continued to feature prominently on investors’ radar after China warned countries against striking a broader economic deal with the United States at Beijing’s expense.

Fed policymakers have recently flagged that tariff uncertainty was clouding their outlook and dampening growth amid Trump’s repeated calls for lower interest rates.

The uncertainty over trade and monetary policies has hit stocks hard this year, with the S&P 500 down more than 10 per cent this year and 14 per cent from the record high it hit in February.

Company results will be keenly watched this week for clues on how corporations are navigating uncertainty as Tesla and Alphabet kick off earnings for the “Magnificent Seven” megacap stocks.

Netflix shares rose 3.2 per cent following an upbeat revenue outlookfrom the streaming giant despite possible economic turbulence.

China warns countries against striking trade deals with US at its expense

Capital One Financial gained 4.1 per cent after US banking regulators said on Friday that they had approved its $35.3 billion purchase of Discover Financial Services.

S&P 500 consensus expected earnings growth for 2025.