While the UK market was closed on Monday for the Easter bank holiday, US stocks sold off as president Donald Trump hurled criticism at Federal Reserve chair Jerome Powell.
Trump has become increasingly critical of Powell for allegedly keeping interest rates too high. In a social media post on Monday morning, Trump suggested it was time for "pre-emptive" rate cuts and that there was "virtually no inflation".
"With these costs trending so nicely downward, just what I predicted they would do, there can almost be no inflation, but there can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW," Trump said on his social media platform Truth Social.
US stocks plunged following Trump's comments, with the S&P 500 (^GSPC) closing Monday's session down 2.4%, the tech-focused Nasdaq (^IXIC) sliding 2.6% and the Dow Jones Industrial Average (^DJI) falling 2.5% into the red. Chipmaker Nvidia (NVDA) was among the stocks caught up in the sell-off, slumping 4.5% on Monday.
"Not content with rattling foreign powers, domestic consumers and investors, the president launched another salvo on the Federal Reserve chair which sent markets lower again," said Richard Hunter, head of markets at Interactive Investor.
"It is unclear whether there is constitutional room to remove the Fed chair early, but in any event the attack does little to improve the reputation of the US at a time when the validity of traditional havens such as the dollar and Treasuries are being brought into question."
Shares in electric vehicle (EV) company Tesla (TSLA) also fell on Monday, closing the session down 5.8%.
Tesla is due to report its first quarter results on Tuesday after the bell, which comes as the company has experienced sliding sales and CEO Elon Musk faces a backlash over his political activities.
Earlier in April, Tesla reported first quarter global deliveries that missed estimates by a long way. For the quarter, Tesla notched 336,681 deliveries compared to expectations of 390,342, according to Bloomberg consensus estimates, making it the worst quarter for deliveries since the second quarter of 2022.
Meanwhile, protesters have gathered at Tesla showrooms around the world to demonstrate against Musk's role in heading up Trump's Department of Government Efficiency (DOGE) and overseeing cuts to government agencies.
In the fourth quarter, Tesla posted revenue of $25.7bn (£19.2bn), which was well below the $27.2bn expected by analysts, as well as being up just 2% on the same period in the previous year. Adjusted earnings per share of $0.73 also came in below expectations of $0.75. For the full-year, Tesla generated revenue of $97.7bn, which was up just 1% on 2023.
For the first quarter, Hargreaves Lansdown senior equity analyst Matt Britzman said that "revenue is expected to come in broadly flat year-on-year, with a drop in earnings as Tesla transitioned to the refreshed version of its best-selling car, the Model Y."
FILE PHOTO: Tesla CEO Elon Musk greets U.S. President Donald Trump as they attend the NCAA men's wrestling championships in Philadelphia, Pennsylvania, U.S., March 22, 2025. REUTERS/Nathan Howard/File Photo ·REUTERS / Reuters
In Europe, shares in Roche (ROG.SW) were little changed after the Swiss pharmaceuticals company announced a sizeable new investment in the US.
Roche said on Tuesday that it planned to invest $50bn in pharmaceuticals and diagnostics in the US over the next five years. This investment includes new research and development sites, along with new and expanded manufacturing facilities in Indiana, Pennsylvania, Massachusetts and California, as well as an additional site which will be announced soon.
Roche said this investment would create more than 12,000 new jobs and stated that once its new and expanded manufacturing capacity comes online, it would mean the company will export more medicines from the US than it imports.
The move comes amid concerns about Trump's plans to impose tariffs on imports of pharmaceuticals to the US, with the president having warned earlier this month that duties would be announced "very shortly".
Another European pharmaceutical giant in focus on Tuesday was Novo Nordisk (NOVO-B.CO), with its shares down 7.4% in morning trading.
This came after rival Eli Lilly (LLY) posted positive results from its phase three trial of a weight-loss pill on Thursday. Eli Lilly said its orforglipron pill "demonstrated statistically significant efficacy results and a safety profile consistent with injectable GLP-1 medicines" in its trial.
David A. Ricks, Ely Lilly chair and CEO, said: "As a convenient once-daily pill, orforglipron may provide a new option and, if approved, could be readily manufactured and launched at scale for use by people around the world."
The positive trial results appeared to have sparked concerns among investors that such a treatment could pose a threat to the market share of Novo Nordisk's popular injectable weight-loss treatments Ozempic and Wegovy.
In the UK market, precious metals miner Fresnillo was the biggest riser on the FTSE 100 (^FTSE), climbing nearly 3% on Tuesday morning.
This came as gold prices surged to fresh highs, briefly topping the $3,500 per ounce mark, before easing back.
Investors have been flocking to gold amid uncertainty over Trump's fast-moving tariff agenda. The president's criticism of Fed chair Powell appears to be the latest concern driving investors to gold, which is considered a safe haven asset.
Russ Mould, investment director at AJ Bell (AJB.L), said: "If the administration is able or willing to follow through on its threat to fire Fed chair Jerome Powell before his term is up next year, it could provoke an even stronger reaction amid fears about the implications for inflation.
"US currency and government debt are often a safe haven during times of market turbulence but, with America the source of much of the recent volatility, investors have been reaching for another obvious port in the storm, gold, in large numbers."
