'Sell America' is back: All the biggest moves today as Trump whips up fresh market turmoil
TIMOTHY A. CLARY / AFP via Getty Images
- The "sell America" trade returned Monday as investors dumped stocks, Treasurys, and the dollar.
- The moves were sparked by the investigation into Jerome Powell, raising concerns about Fed independence.
- Traders also sold credit card stocks on Trump's proposal to cap interest at 10%.
The "sell America" trade is seeing a revival on Monday.
Investors were reacting to developments over the weekend, including a proposal to cap credit card interest rates and the Department of Justice's criminal investigation of Fed Chair Jerome Powell.
Major indexes were down in early morning trading, with the Dow dropping more than 400 points as investors took in the news.
Here's where US indexes stood shortly after the 9:30 a.m. opening bell on Monday:
- S&P 500: 6,940.01, down 0.4%
- Dow Jones Industrial Average: 49,048.51, down 1% (-455.46 points)
- Nasdaq composite: 23,657.34, down 0.04%
The Justice Department's probe relates to the Fed Chair's testimony last year about the renovation of the Fed's office buildings, a project Trump has criticized for its cost.
Trump, who said he has decided on his pick to replace Powell when the Fed Chair's term ends his May, said he had no knowledge of the probe when speaking to NBC Sunday evening.
"I don't know anything about it, but he's certainly not very good at the Fed, and he's not very good at building buildings," he said.
The White House did not immediately respond to a request for comment.
The market has a complicated reaction to situations when it appears that Trump is applying pressure on Powell. The president has demanded that the Fed chief lower interest rates for years, including in his first term. The concern is that if rates are lowered prematurely, it could backfire and cause inflation to flare up again, which would force the central bank to turn hawkish and potentially hike rates down the road.
The knee-jerk reaction among investors is something markets have seen before.
"All these moves suggest a possible return of the 'sell America' trade," Paul Hickey, the co-founder of Bespoke Investment Group, wrote in a note on Monday, referring to the broad sell-off in US assets in 2025 as investors fretted over tariffs and the health of the economy.
"Investors rushed to cut their exposure to US assets," David Morrison, a senior market analyst at Trade Nation, wrote in a note, pointing to concerns about the Fed's independence. "Investors were also rattled by the Fed Chair's robust response," he added, referring to the video statement from Powell released on Sunday.
Here were the moves investors saw Monday morning.
Bond yields edge up
Treasury yields were up as US debt securities faced selling pressure. The benchmark 10-year US Treasury yield climbed two basis points.
"Treasury yields are higher, and the curve is steeper amid fresh attacks on the Federal Reserve's independence," John Canavan, a lead analyst at Oxford Economics, wrote in a note on Monday.
Investors have shed Treasurys in other times when the president has meddled with the Fed or threatened Powell. Yields spiked last April when Trump first said he could fire the Fed chair, with the president tempering his views following big bouts of selling in the Treasury market.
Gold rises to fresh records
Gold, which acts as a hedge against inflation and a haven during bouts of geopolitical turmoil, soared to records, rising 2% and breaking through $4,600 for the first time on Monday.
The precious metal is up 4% from levels at the start of the year and just recorded its best-ever annual run since 1979, around the time inflation began to soar in the US.
Demand for safe havens looks "strong," particularly as investors continue to weigh tensions between the US and other countries, like Venezuela and Greenland, Trade Nation's Morrison said.
Other metals that typically rally alongside gold, like silver and copper, were also up.
US dollar is under pressure
The US Dollar Index, which measures the greenback against a basket of foreign currencies, declined 0.4% on Monday, a possible sign that investors are reducing their exposure to dollar assets due to concerns about the Fed's independence.
"The investigation into Mr Powell has raised concerns about the Fed's autonomy, an unfavourable backdrop for the greenback," Morrison said.
"The broader fear is that the move could continue to erode Fed autonomy, which may raise long-term inflation expectations and be bearish for the greenback," Enrique Diaz-Alvarez, the chief economist at Ebury, wrote in a note.
Credit card stocks plunged
The financial sector was rocked after Trump proposed that credit card interest rates be capped at 10% for a one-year period in a post on Truth Social.
"Please be informed that we will no longer let the American Public be 'ripped off' by Credit Card Companies that are charging Interest Rates of 20 to 30%, and even more, which festered unimpeded during the Sleepy Joe Biden Administration. AFFORDABILITY!" Trump wrote on his social media platform.
Credit card issuers and other large lenders were down on the news:
- Capital One: -9%
- Citigroup: -4%
- American Express: -4%
- JPMorgan: -2%
- Visa: -2%
- Mastercard: -2%
"Trump's proposal to cap credit card rates at 10% for a year added another layer of uncertainty, particularly for banks," Morrison added.