Yesterday, while many European markets remained closed, Wall Road witnessed one other turbulent session as US President Donald Trump took intention at Federal Reserve Chair Jerome Powell.
Trump Assaults Fed Chair, Once more
On Monday, President Trump renewed assaults on Fed Chair Jerome Powell on social media. The president wrote that the US economic system could also be heading for a slowdown “until Mr. Too Late, a serious loser, lowers rates of interest, NOW”.
The US president has usually criticised Powell for not reducing rates of interest shortly sufficient. Yesterday’s feedback added to uncertainty relating to the US economic system and adopted an identical assault final week, during which Trump appeared to name for Powell to be fired.
President Trump’s feedback pre-empted a sell-off in US equities, with the S&P 500, Dow Jones and Nasdaq closing the session greater than 2% decrease.
The US greenback additionally prolonged current losses. The Greenback Index, which measures the buck in opposition to a basket of foreign currency, ended 1.1% decrease on Monday, hitting its lowest degree in additional than three years.
Different Actions within the Market
While Trump’s feedback sparked a dump in US shares and the US greenback, cash continued to circulation into gold, as traders search secure havens.
The shiny steel jumped 3.5% yesterday and continued to rise on Tuesday morning, taking its year-to-date beneficial properties to greater than 30% to this point in 2025.
In Forex, the Swiss franc, Japanese yen and euro continued to achieve floor on the US greenback.
Since Donald Trump’s “liberation day” announcement on 2 April, the franc has gained round 8.4% in opposition to the greenback, hitting a ten-year excessive within the course of.
The yen and the euro have each climbed round 6.2% over the identical timeframe, with the euro hitting its highest degree since November 2021.
ECB Slashes Charges
Final Thursday, the European Central Financial institution (ECB) reduce rates of interest by 25 foundation factors, as had been broadly anticipated.
The most recent rate of interest discount, the central financial institution’s third this 12 months, got here after annual headline inflation within the euro space fell to 2.2% in March, with the ECB noting that “the disinflation course of is properly on observe”.
Nonetheless, the prospect of a possible commerce struggle with the US undoubtedly additionally performed an element within the determination to chop charges. In its coverage assertion, the ECB famous that “the outlook for development has deteriorated because of rising commerce tensions”.
Earnings Watch
We’re at present in earnings season, with many corporations scheduled to announce outcomes from the primary quarter of the 12 months over the approaching weeks.
Final week, Netflix launched sturdy Q1 outcomes which beat expectations because of resilient subscription income within the face of client warning.
Income and Earnings per Share (EPS) grew by greater than anticipated to $10.54 billion and $6.61 respectively within the first quarter. The streaming large reiterated its full-year income steerage of $43.5-$44.5 billion.
Conversely, UnitedHealth’s quarterly earnings, introduced on Thursday, missed analyst expectations. The US medical insurance firm additionally slashed its full-year revenue forecast, inflicting share value to tumble 22% within the following session.
This week will see plenty of different high-profile corporations releasing quarterly earnings together with Tesla, on Tuesday, and Google mum or dad Alphabet, on Thursday.
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