The 'sell America' trade is crushing markets as Trump butts heads with the Fed

• Stocks, bonds, and the dollar dropped sharply on Monday.
• Recent comments from the White House have investors worried about Fed independence.
• Trump stepped up attacks on Monday, calling Powell a "loser" and demanding that rates be lowered.

The "sell America" trade was in full swing as investors kicked off the week on Monday.

US stock indexes dropped, the US dollar tumbled to a three-year low, and Treasury yields rose. While tariff and trade war fears have been the culprit behind the ailing US exceptionalism trade for much of 2025, Donald Trump's public criticism and insistence that he wants to fire Fed chief Jerome Powell is the latest development rattling investor confidence.

Here are the three "sell America" moves the market is seeing:

Stocks

• S&P 500: 5,117.86, down 3.1%
• Dow Jones Industrial Average: 37,983.54, down 3% (-1,159 points)
• Nasdaq Composite: 15,734.88, down 3.4%

Bonds

• 10-year Treasury yield: 4.39%, up 5 basis points
• 30-year Treasury yield: 4.89%, up 9 basis points

Currencies

• US dollar down more than 5% versus the euro and yen
• Dollar Index fell 0.8%, paring losses of as much as 1.3%

On Friday, Kevin Hassett, the director of the National Economic Council, said that Trump will "study" ways to remove the Fed chair. The president has long lambasted Powell for not lowering interest rates. Trump's frustration gained steam since Powell's latest speech, in which he suggested that the president's tariffs could create policy issues for the central bank.

Trump fired off another salvo of criticism aimed at the Fed chair on Monday. In a post on Truth Social, the president called Powell a "major loser" who has been too late in taking action on interest rates.

But White House interference in the Fed's leadership would not sit well with investors, and attempts to politicize monetary policy decisions would likely introduce further uncertainty into markets.

"Not only is the independence of the Fed clearly under threat, but the prospect of de-dollarisation and a move away from US hegemony is an increasingly realistic one," said Michael Brown, a senior research strategist at Pepperstone.

Here's more detailed context behind the moves across asset classes:

Stocks

Major stock indexes have swung violently over the past few weeks in reaction to Trump's sweeping tariffs unveiled in early April. Though most of the trade duties were later paused, tariffs on China have soared even higher, and the resulting trade war has been a challenge for investors to digest.

No new trade deals were announced over the weekend to uplift that market's spirits; instead, China warned that it would take countermeasures against any nation that reaches a deal with the US to isolate the country from global trade.

Bonds

Bond prices, which move in the opposite direction to yields, have dropped in recent weeks amid threats to US growth and deep uncertainty around trade. Commentators have observed that instability in the US economic outlook has hurt Treasurys' ultrasafe reputation.

It's a dynamic that's played out several times already this year, with tariff uncertainty and policy headwinds sending yields surging.

Bond vigilantes may have forced Trump to hit pause on the trade war earlier in the month, but headwinds for US Treasurys also include foreign investors selling and volatility in the so-called basis trade orchestrated by hedge funds.

Trump's attacks against Powell will likely only heighten investors' nervousness, keeping yields elevated.

Dollar

The greenback has continued to plunge, sending the US Dollar Index deeper to a three-year low.

"President Trump's renewed criticism of Fed Chair Powell … is a reminder that trade policy is not the only channel through which the administration's unconventional approach could undermine the dollar and US asset markets," Capital Economics wrote.

The dollar's move lower goes against earlier expectations, as it was implied that tariffs would support currency levels.