Why did the US stock market drop today Monday, 21 April 2025?
Trump vs. the Fed
President Trump once again went after Jerome Powell, the head of the Federal Reserve. He’s saying the Fed should be cutting interest rates right now, and even hinted at firing Powell. That kind of talk shakes up the market because it makes it seem like the Fed isn’t in control anymore. Investors like stability and predictability , and this kind of political drama just creates more uncertainty.
Global Trade Tensions
Yeah, trade tensions are flaring up again. Trump made some strong comments about China and Japan, and now China is warning it might retaliate. Whenever that kind of talk starts, the markets get nervous. It’s not just about tariffs , it’s about the fear that global supply chains could get disrupted again, which means higher costs for companies and less profit.
Disappointing Tech Earnings
The big tech names kind of let everyone down today. Meta dropped almost 15% after warning that revenue might come in lower and costs are going up. That spooked investors because when giants like Meta, Amazon, and Google take a hit, the whole market feels it. These companies are basically the backbone of the stock market right now ,if they stumble, everyone does.
Inflation and Economic Worries
Here’s the scary part: inflation is still hanging around, but at the same time, the economy isn’t growing like it should. That’s what we call stagflation and it’s kind of the worst of both worlds. New data came out today showing prices are still rising faster than expected, and economic growth is slowing. It puts the Fed in a tough spot — raise rates and risk a slowdown, or ease up and risk letting inflation run wild.
Spike in Market Volatility
And finally, the ‘fear index’ ,also known as the VIX , jumped big time today. That tells us investors are feeling pretty edgy. A lot of people are pulling their money out of stocks and moving into safer places like gold and bonds. Basically, people are hitting the brakes and saying, ‘Let’s wait and see what happens before we put more money at risk.’
