The New York Stock Exchange suffered a significant setback on Monday.
Returning from the Easter holiday break, the market immediately faced intense selling pressure as U.S. President Donald Trump began undermining Federal Reserve Chair Jerome Powell’s authority.
As the day progressed, the initial steep decline slightly eased, with the three major indices trimming their losses from over 3% to around 2.5%.
Major tech companies in the Magnificent 7 (M7) group also fell sharply, with Tesla plunging 5.8% and Nvidia dropping 4.5%.
Sell-off
Investors, back after the three-day break, began offloading their holdings as soon as trading resumed.
Doubts about the U.S. central bank’s independence sent the dollar tumbling to its lowest level in over three years, while gold prices soared past 3,400 USD per ounce, hitting record highs. This underscored a strong risk aversion sentiment in asset markets, particularly regarding U.S. investments.
The Dow Jones Industrial Average plummeted 971.82 points (2.48%) to close at 38,170.41.
The Nasdaq also took a hit, falling 415.55 points (2.55%) to finish at 15,870.90.
The S&P 500, which reflects a broader market performance by including both large-cap and tech stocks, also dropped down124.50 points (2.36%) to end at 5,158.20.
The Chicago Board Options Exchange (CBOE) Volatility Index (VIX), Wall Street’s Fear Gauge, surged dramatically, jumping 4.17 points (14.06%) to 33.82.
Tesla Plunge
The M7 big tech stocks all suffered sharp declines.
Tesla and Nvidia, in particular, bore the brunt of the selloff.
Nvidia shares tumbled 4.58 USD (4.51%) to 96.91 USD amid fears that export controls on H20 semiconductors bound for China would damage its Chinese sales.
Following the confirmation of H20 semiconductor export restrictions after the market closed on April 15, Nvidia’s stock price plummeted 13.6% over the three trading days from April 16 to 21.
Tesla also suffered a massive drop due to a series of negative developments.
Over the weekend, news emerged about the delays in the release of a budget version of Model Y. Additionally, the company faced a lawsuit in California over alleged odometer manipulation. Pessimism about the upcoming first-quarter earnings report, scheduled for release after market close on Tuesday, further compounded the pressure.
Tesla shares plunged 13.87 USD (5.75%) to 227.50 USD, after dropping as much as 7.7% during intraday trading.
While the odometer tampering allegations will be contested in court, analysts suggest it is unlikely that Tesla was involved in systematic fraud. The plaintiff claims Tesla inflated mileage records to shorten warranty repair periods.
Apple down 1.9%
Other M7 stocks, including Apple, also saw significant declines.
Apple closed down 3.82 USD (1.94%) at 193.16 USD, while Alphabet fell 3.50 USD (2.28%) to 149.86 USD.
Microsoft (MS) dropped 8.66 USD (2.35%) to 359.12 USD, and Meta Platforms plummeted 16.82 USD (3.35%) to 484.66 USD.
Amazon slid 5.29 USD (3.06%) to 167.32 USD.
Investment bank Raymond James downgraded its recommendation for Amazon from Strong Buy to Outperform and slashed its target price from 275 USD to 195 USD.
Raymond James expressed concerns that the ongoing U.S.-China tariff war would directly impact Amazon’s e-commerce and advertising revenues.
