US stocks retreat as Trump threatens new tariffs and fires a Fed governor. The US dollar tumbles on independence concerns while Gold extends gains on safe-haven demand.
Trump’s tariff tantrum and firing of Fed Governor Cook sparked volatile moves
The US stock market retreated yesterday, following President Trump’s latest salvo of tariff threats. In it, he vowed retaliation duties against other countries’ digital services taxes on American technology companies.
In addition, Trump told reporters at the White House on Monday that he would consider charging China a 200% tariff if they do not provide sufficient supplies of rare earth magnets, despite both countries being in an extended tariff truce till 10 November 2025
All major US stock indices closed lower, led by underperformance in the Russell 2000 (-1%) and Dow Jones Industrial Average (-0.8%), while the S&P 500 and Nasdaq 100 posted smaller declines of -0.4% and -0.3%, respectively.
Asia-Pacific equities traded broadly lower today, mirroring the weakness on Wall Street. Japan’s Nikkei 225 declined by -1% to hit a two-week low, but still traded above its 20-moving average, which is acting as an intermediate support at around 42,000. Hong Kong’s Hang Seng Index shed -0.7%.
The US dollar tumbled in today’s early session over concerns of the US Federal Reserve’s independence, as US President Trump officially fired Fed Governor Lisa Cook over allegations of falsified documents on mortgage applications.
The US Dollar Index staged an intraday decline of -0.3% before trimming its losses to trade almost unchanged at the time of writing as market participants digested the drama with Cook, who said that she would not step down from the Fed and vowed to challenge Trump’s “illegal action”.
Tariff-induced sell-off in equities led to a resurgence of safe-haven demand. Gold (XAU/USD) extended its gains from last Friday with an intraday rally of 0.3% to hit a two-week high.
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