US stocks sink with the US dollar’s value as investors retreat further from the United States
By STAN CHOE Associated Press Business Writer NEW YORK AP U S stocks are sinking Monday as investors pull away from the United States because of the uncertainty caused by President Donald Trump s transaction war and his criticism of the Federal Reserve The S P was lower in early trading and back to below its record set two months ago The Dow Jones Industrial Average was down points or as of a m Eastern time and the Nasdaq composite was lower Related Articles Big Tech s Magnificent Seven heads into earnings season reeling from Trump turbulence Instagram tries using AI to determine if teens are pretending to be adults Deportation fears add to mental healthcare problems confronting resort town workers FSU shooting casualties include a school employee whose dad was a Cuban exile turned CIA operative NASA s Lucy spacecraft is speeding toward another close encounter with an asteroid Perhaps more worryingly U S Treasury bonds and the value of the U S dollar also sank as a retreat continues from U S markets It s an atypical move because Treasurys and the dollar have historically strengthened during past episodes of nervousness But this time around it s policies directly from Washington that are causing the fear and potentially weakening their reputations as specific of the world s safest investments Trump continued his tough talk on contract over the weekend even as economists and investors continue to say his stiff proposed tariffs could cause a recession unless they re rolled back The golden rule of negotiating and success He who has the gold makes the rules Trump disclosed in all capitalized letters on his Truth Social Infrastructure He also declared that the businessmen who criticize tariffs are bad at business but really bad at politics also in all caps Trump has in the last few days focused more on China the world s second-largest financial market which upped its own rhetoric against the world s largest economic system China on Monday warned other countries against making commerce deals with the United States at the expense of China s interest as Japan South Korea and other countries try to negotiate agreements that would lower U S tariffs on their own products If this happens China will never accept it and will resolutely take countermeasures in a reciprocal manner China s Commerce Ministry disclosed in a declaration Also hanging over the realm are worries about Trump s anger at Federal Reserve Chair Jerome Powell Trump last week criticized Powell again for not cutting interest rates sooner to help give the business activity more juice The Fed has been resistant to lowering rates too fast because it does not want to allow inflation to reaccelerate after it has slowed nearly all the way down to its goal from more than three years ago A move to fire Powell would likely send another bolt of fear through financial markets While investors would love to see lower interest rates because they would give at least a short-term boost to prices for stocks and other investments the larger worry is that a less independent Fed would be less effective at keeping inflation under control in the long run It would further weaken if not kill the United States reputation as the world s safest place to keep cash On Wall Street several Big Tech stocks helped lead indexes lower ahead of their latest earnings reports coming later this week Tesla sank for example The electric conveyance s stock came into Monday roughly below its record set in December on criticism that its stock price had gone too high and that its brand has become too entwined with Elon Musk who s leading the U S administration s efforts to cut spending On the winning side of Wall Street were Discover Financial Services and Capital One Financial which jumped after the U S establishment approved their proposed merger Discover rallied and Capital One rose In the bond arena shorter-term Treasury yields fell as investors keep alive hopes that the Fed may cut its main overnight interest rate later this year in order to help the economic activity But longer-term yields rose as doubts continue to rise about the United States standing in the global financial sector The yield on the -year Treasury rose to from at the end of last week and from just about earlier this month That s a substantial move for the bond region The U S dollar s value meanwhile fell against the euro Japanese yen the Swiss franc and other currencies In stock markets abroad Tokyo s Nikkei fell Indexes fared better in Seoul where stocks rose and in Shanghai which saw a gain AP Business Writer Elaine Kurtenbach contributed
