Markets slide amid political tensions, rising gold prices, and oil market fluctuations.
Global financial markets opened the week on a tense note as stocks and the US dollar fell sharply, following President Donald Trump’s public attacks on Federal Reserve Chair Jerome Powell. The move rattled investor confidence, pushing safe-haven gold prices to new record highs.
In Asia, major indices reflected the uncertainty. Japan’s Nikkei index dropped more than 1%, Taiwan’s stocks slipped by 1%, and South Korea’s benchmark remained steady. However, Chinese stocks edged slightly higher in early trading. Meanwhile, US stock futures also turned red, with S&P 500 futures down 0.64% and Nasdaq futures falling 0.53%.
Markets were already jittery due to escalating geopolitical risks, and Trump’s latest interference with the Fed added a fresh layer of anxiety. “Any signs of political pressure on monetary policy could undermine the Fed’s independence and complicate the path ahead for interest rates just as investors are looking for stability amid global volatility,” warned Charu Chanana, Chief Investment Strategist at Saxo Singapore.
The dollar took a hit, tumbling against major currencies. The euro touched a three-year high, the yen hit a seven-month peak, and the Swiss franc surged to its strongest level against the dollar in more than a decade. Emerging market currencies also saw gains as investors sold off dollars.
Meanwhile, the benchmark US 10-year Treasury yield rose slightly, adding 1.7 basis points to reach 4.344% during Asian trading hours.
Adding to the market focus, the US earnings season kicks into gear this week with investors closely watching results from tech giants like Alphabet, chipmaker Intel, and EV leader Tesla. The “Magnificent Seven” megacap stocks are under pressure in 2025, with Alphabet down about 20% and Tesla plunging 40% year-to-date.
On the trade front, President Trump indicated progress in behind-the-scenes conversations with China amid the ongoing trade war. However, China’s ambassador to the US stressed that Washington must show “respect” before meaningful negotiations can resume.
In commodities, gold soared more than 1% to a record high of $3,370.17 per ounce, continuing its impressive 26% gain this year as investors seek safe-haven assets. In contrast, oil prices fell sharply after positive developments in nuclear talks between the US and Iran, easing fears over Middle East supply disruptions. Brent crude futures dropped 1.75% to $66.77 a barrel, while US West Texas Intermediate fell 1.75% to $63.55.
(Colombo/Apr22/2025)