By Caroline Valetkevitch
NEW YORK (Reuters) -Major U.S. stock indexes were down more than 3% each and the dollar index slid to a three-year low on Monday as U.S. President Donald Trump’s continued attacks on the Federal Reserve chair and the bank’s monetary policy rattled investors.
Investors flocked to safe-haven assets including gold, which hit another record high, and the Swiss franc.
Trump on Monday repeated his criticism of Fed Chair Jerome Powell and said the U.S. economy could slow down unless interest rates are lowered immediately.
White House economic adviser Kevin Hassett said on Friday, when many markets were closed, that Trump and his team would study the matter, when asked if firing Powell was an option. Trump had launched a scathing attack against Powell on Thursday.
The comments on Powell fueled worries about the Fed’s independence in setting a monetary policy path and about the outlook for U.S. assets. Most markets were closed on Friday and some, including most of Europe, remained on holiday for Easter Monday, leading to thinner-than-usual liquidity.
Powell is “a steady hand, he’s a known entity, he’s stability in a world of uncertainty. He brings that calmness to the market, something people can rely on that hasn’t changed stability while all this chaos is going on,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.
Trump’s tariffs have roiled financial markets in recent weeks and also remain a big concern for investors.
The Fed, after a series of rate cuts late last year, has left its benchmark policy rate on hold in the range of 4.25% to 4.50% since December.
Chicago Fed President Austan Goolsbee said on Sunday that he hopes the United States is not moving to an environment where the ability of the central bank to set monetary policy independent of political pressure is questioned.
The Dow Jones Industrial Average fell 1,310.86 points, or 3.35%, to 37,832.34, the S&P 500 fell 180.34 points, or 3.41%, to 5,102.41 and the Nasdaq Composite fell 589.42 points, or 3.62%, to 15,696.96.
MSCI’s gauge of stocks across the globe fell 15.67 points, or 1.97%, to 777.75.
“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,” said Adam Sarhan, chief executive at 50 Park Investments in New York.
“We’re seeing more weakness now in the dollar and gold is at all-time highs, so clearly investors are spooked and fear is taking over.”
Spot gold hit a record high of $3,424.25 earlier in the session.
Against a basket of currencies, the dollar slid as low as 97.923, its lowest since March 2022. The currency also fell to a decade-low against the Swiss franc, while the euro broke above $1.15.
The euro was last up 1.09% at $1.1515. Against the Japanese yen, the dollar weakened 1.1% to 140.61. Against the Swiss franc, the dollar weakened 1.08% to 0.807.
Cryptocurrencies rose. Bitcoin gained 2.16% to $86,924.98. Ethereum declined 0.8% to $1,576.58.
The yield on benchmark U.S. 10-year notes rose 6.4 basis points to 4.391%, from 4.327% late on Thursday.
China on Monday accused Washington of abusing tariffs and warned countries against striking a broader economic deal with the United States at its expense, ratcheting up its rhetoric in the recent trade war between the countries.
First-quarter results from U.S. companies continue to roll in, with reports from top names like Alphabet due this week.
Companies and investors are grappling with a tariff landscape that is likely to keep shifting as the Trump administration negotiates with countries.
Oil prices were lower. U.S. crude fell 2.4% to $63.13 a barrel and Brent fell to $66.19 per barrel, down 2.6% on the day.
(Additional reporting by Stephen Culp in New York and Ankur Banerjee; Editing by Jacqueline Wong, Muralikumar Anantharaman, Kim Coghill, Philippa Fletcher and Sandra Maler)
