Global stock markets dropped on Tuesday following a series of surprise moves by US President Donald Trump, including the dismissal of a Federal Reserve official and fresh threats of export controls and tariffs.
Investors had been upbeat since Friday when Federal Reserve Chairman Jerome Powell hinted at possible interest rate cuts, boosting confidence in the world’s largest economy. But optimism faded quickly as Wall Street cooled on Monday ahead of Nvidia’s earnings report, which many see as a key indicator of the AI-driven tech boom.
Asian markets mirrored Wall Street’s losses, with Hong Kong’s main index sliding 1.2%. Tokyo, Shanghai, Seoul, and Sydney also posted declines, while Taipei managed a small gain.
In Europe, Paris fell more than 2% amid concerns over a looming political crisis, while London and Frankfurt also edged lower in morning trading.
Adding to market jitters, Trump announced on Monday that he was removing Federal Reserve Governor Lisa Cook, citing alleged false mortgage statements.
The move, described as highly unusual, is expected to face legal challenges and has raised concerns over the independence of the central bank. The US dollar dipped before recovering after Cook responded with a statement saying she intended to remain in her position.
“This shows how increasingly politicised the central bank is becoming,” said Neil Wilson, a UK investor strategist at Saxo Markets.
He added: “The question for markets right now is about the September meeting, but be in no doubt that we are witnessing a regime shift like we have not seen in decades.”
Trump also warned of “substantial additional tariffs” on imports from countries that impose digital taxes on US companies. He further threatened export restrictions on “highly protected US technology and chips,” though he gave no details.
Traders are now awaiting Thursday’s US GDP report and Friday’s inflation data, which could give fresh clues on how much interest rates may be cut. Meanwhile, oil prices slipped slightly after recent gains, with speculation about a possible Ukraine peace deal influencing the market.
