Markets Slide as Trade Tensions and Fed Uncertainty Pressure US Assets

US stock futures fell and the dollar weakened sharply on Monday as renewed concerns over trade policy and potential interference with the Federal Reserve unsettled global markets.

Investors appeared increasingly cautious as they weighed rising tensions with China and speculation that President Donald Trump may seek to remove Federal Reserve Chair Jerome Powell.

All three major US index futures — the Dow, S&P 500, and Nasdaq — were down around 1% in early trading. Meanwhile, the US dollar declined broadly against major currencies, sending the ICE US Dollar Index to a three-year low. The greenback fell to multi-year lows against the euro, yen, Swiss franc, and British pound.

The decline in the dollar was accompanied by a surge in safe-haven assets. Gold soared to a new record high above $3,400 per troy ounce, and Bitcoin also rallied. Treasury yields rose, with the 10-year US note climbing to 4.366%.

Investor sentiment was further dampened by President Trump’s recent criticisms of Powell and reports that his administration is exploring legal options to remove the Fed Chair — a move that could threaten the perceived independence of the central bank. While such a dismissal would face significant legal and political hurdles, even the suggestion has increased market volatility.

“Firing Powell stretches belief,” said one strategist, “but even the perception that it’s possible undermines trust in US institutions.”

Analysts warn that any erosion of confidence in the Fed’s independence could have long-lasting implications for the dollar and broader financial markets.

Trade tensions also remain a central concern. Over the weekend, China warned other nations against making trade deals that would isolate Beijing, while President Trump reiterated his views on what he described as “non-tariff cheating,” including currency manipulation and technical standards. These statements follow a new wave of tariffs and customs delays, with DHL temporarily halting high-value shipments to the US.

Amid the uncertainty, global markets reflected a mixed tone. Japan’s Nikkei fell 1.3%, while China’s CSI 300 index rose 0.3%. Many markets in Europe and Asia, including Hong Kong, remained closed for the Easter holiday, thinning global trading volumes.

On the corporate front, investors are also keeping an eye on earnings reports from regional banks, including Comerica and Zions Bancorp, due later Monday.

Analysts suggest the dollar’s weakness may persist if concerns over trade and central bank policy continue to mount.

“It’s really a buffet for any dollar bear,” said one market strategist, citing both the “self-inflicted uncertainty” from tariffs and the shake-up at the Fed.

With input from the Wall Street Journal, Reuters, and Bloomberg.