In a dramatic turn of events, US stocks and the dollar took a nosedive following President Donald Trump's fiery criticism of Federal Reserve Chair Jerome Powell. Labeling Powell "a major loser" for his reluctance to cut interest rates, Trump's harsh words have sent shockwaves through the financial markets.

In a pointed social media statement, Trump urged Powell to act swiftly, advocating for preemptive interest rate cuts to revitalize the economy. He chastised Powell for being too slow to adapt to evolving economic circumstances, asserting, "There can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW."

This sharp attack on Powell comes on the heels of escalating fears over a potential recession, exacerbated by Trump's own tariff strategies that have triggered widespread stock market declines. Their escalating conflict, particularly notable since Powell was appointed by Trump himself, has added fuel to an already volatile marketplace.

The fallout was evident, with the S&P 500 plummeting approximately 2.4% on Monday alone, marking a staggering 12% drop for the year. The Dow Jones Industrial Average sank 2.5%, reducing its value by about 10% in 2023, while the Nasdaq experienced over a 2.5% decline, down roughly 18% since January.

In a surprising twist, even traditional safe havens like the dollar and US government bonds were not immune to this market upheaval. The dollar index, a measure of the greenback’s strength against major currencies including the Euro, hit its lowest point since 2022. Additionally, interest rates on US government debt rose, as anxious investors sought higher returns.

As trading resumed on Tuesday morning, major stock indexes remained muted. The Nikkei 225 in Japan and Australia’s ASX 200 dipped around 0.1%, while Hong Kong's Hang Seng Index fell approximately 0.5%.

On a contrasting note, gold prices soared to a record high as investors flocked to this precious metal, viewed as a reliable refuge during economic uncertainty. Spot gold surged past $3,400 (3,563) per ounce for the first time on Monday, signifying a shift in investor sentiment amid escalating economic concerns.