US stocks slump after Trump attacks Fed

Good morning. Here's what happened overnight and what you need to know today.

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1.

Dollar doubts: Wall Street stocks and the US dollar fell sharply after President Donald Trump intensified attacks on Federal Reserve Chair Jerome Powell, demanding immediate rate cuts and calling him a “major loser”. The Dow industrials fell as much as 1,312 points or 3.35%, the S&P 500 dropped as much as 3.42%, and the Nasdaq 3.69% before paring back some losses by the close. Tesla fell as much as 7.69%, while Nvidia and Apple also declined. The ICE US Dollar Index slipped more than 1% to a three-year low, and gold surged past USD3,400 a troy ounce, a new record. Yields on longer-term Treasuries rose, with the 10-year up to 4.38%, from 4.33%. Futures markets are pricing in about 90 basis points of Fed cuts in 2025. On Friday, adviser Kevin Hassett said the White House was studying Powell’s removal. Trump posted there was “virtually” no inflation and called for “preemptive cuts”. Analysts warned Fed independence concerns are eroding dollar confidence. (Capital Brief)(Trump’s post)(Bloomberg)(WSJ)(FT) Correction: This entry has been updated to correct the intraday lows of the stock market moves.

2.

People’s Pope: Prime Minister Anthony Albanese and Opposition Leader Peter Dutton have paid tribute to Pope Francis, following his death at 88 years old from a stroke that led to heart failure. The Argentinian Pope, affectionately known as the ‘People’s Pope’ was the first Latin American pontiff in the history of the Roman Catholic Church, and the first Jesuit to be elected to the throne of St Peter - Jesuits were historically looked on with suspicion by Rome. Albanese described Francis as “a devoted champion and loving father” and said he was close to the people of Australia. Dutton extended condolences to Australians “of Catholic and Christian faith upon the sad news”. Australian government flags will fly at half-mast on Tuesday. In the US, Donald Trump also ordered flags to be lowered but said he had not decided whether he would attend the funeral. Argentina’s President Javier Milei, who had previously insulted the pontiff, is planning to declare seven days of national mourning. (Capital Brief)(ABC)(Newsweek)

3.

Conclave watch: About 135 cardinals – all men – will meet in Conclave in about two weeks to elect a successor to Pope Francis. Predictions, already notoriously difficult, are more so because Francis made many appointments that diversified the College of Cardinals, increasing representation from Asia and Africa, making it harder to identify movements or factions. Among those being talked about as “papabili” – or electable – are Jean-Marc Aveline (France, 66), close to Francis on immigration and interfaith issues; Peter Erdo (Hungary, 72), a conservative who has built bridges with Francis' progressive world; Mario Grech (Malta, 68), secretary general of the Synod of Bishops and a Church reform advocate; Juan Jose Omella (Spain, 79), focused on pastoral care and social justice; and Pietro Parolin (Italy, 70), Vatican secretary of state and veteran diplomat. Others mentioned include Matteo Zuppi (Italy), 69, a key figure in Vatican diplomacy, Luis Antonio Tagle (Philippines), often called the “Asian Francis” and Mykola Bychok, the 45-year-old Ukrainian-born Melbourne cardinal. (Reuters)(NYT)(Bloomberg)

4.

PE retreat: Chinese state-backed funds are cutting off new investment in US private equity, according to the FT, in Beijing’s latest attempt to hit back at US President Donald Trump’s trade war. State-backed funds have been pulling back from investing in the funds of US-headquartered private capital firms in recent weeks after experiencing pressure from the Chinese government. Some of the Chinese funds are also seeking to be excluded from PE investments in US companies, even if those investments are made by buyout groups based elsewhere. Several buyout executives told the FT that Chinese investors have changed their approach to US private equity since the trade war began, and will no longer make new fund commitments to US firms. The news comes as China accused Washington of abusing tariffs, and warned countries against striking economic deals with the US at its expense. (FT)(Reuters)(Bloomberg)

5.

Chaos in the Pentagon: US defence chief Pete Hegseth shared information about US air strikes on Yemen in a second group chat on Signal, according to media reports. In mid-March, Hegseth sent messages which included flight schedules for F/A-18 Hornets tasked with striking Houthi targets to a Signal group that included his wife, brother and personal attorney. The messages were sent on the same day that Hegseth shared similar details in a different Signal chat set up by US National Security adviser Mike Waltz, which had inadvertently included Atlantic editor-in-chief Jeffrey Goldberg. The news comes after Hegseth’s former spokesman, John Ullyot, who resigned last week, said the Pentagon has been overwhelmed by “endless drama” and that the last month has become “a full-blown meltdown.” Trump said he stood behind Hegseth, calling concerns over Hegseth's actions a “waste of time,” while the White House denied an NPR report that the administration was looking for a replacement. (Capital Brief)(NYT)(CBS)(Politico)

6.

Retail pitch: Trump is meeting with major retailers at the White House to discuss relief from sweeping tariffs that have upended global supply chains and rattled US consumers. The meeting, which includes representatives from Walmart, Home Depot, Target and others, comes during a 90-day pause in Trump’s higher tariffs on trading partners except China. Shares of the retailers ticked up on news of the meeting but remained down for the day. American companies have warned business could slow as the import taxes take effect. Trump’s duties on nearly all trading partners and sectors are threatening to increase prices on goods ranging from spirits and apparel to electronics and furniture. Retailers say the fast-changing levies have made it difficult to plan inventory and pricing. Driven by Americans rushing to buy before tariffs took effect, US retail sales surged 1.4% in March—the biggest monthly jump in more than two years. (Bloomberg)

7.

Battery power: China’s CATL, the world’s biggest electric vehicle battery maker, said its new version of the Shenxing battery can deliver a 520km range from five minutes of charging—exceeding BYD’s recently announced system, which adds about 470km in the same time. The battery also charges from 5% to 80% in 15 minutes at -10°C. More than 67 EV models will use the Shenxing battery this year. Analysts said charging speeds have more than doubled in the past year and increased tenfold over 3–4 years. CATL also launched a sodium-ion battery brand, Naxtra, set for mass production in December. It offers 500km range for EVs, 200km for hybrids, and retains over 90% charge at -40°C. CATL also introduced a dual battery system allowing up to 1,500km range. CATL supplies 16 of the world’s biggest carmakers, and over 18.32 million cars using its batteries operate in more than 66 countries. (The Verge)(Reuters)(NYT)(FT)

8.

Zuckerberg moves: A tuition-free private school co-founded by Mark Zuckerberg’s wife, Priscilla Chan, will close after the 2025-2026 academic year, ending nearly a decade of operation as Zuckerberg reshapes his empire to align more closely with the Trump administration. The Primary School has two San Francisco-area campuses and serves over 540 students. At its East Palo Alto campus, 61% of students are Latinx, 7% Black and 7% Pacific Islander, with over 95% identified as under-represented minorities. The closure comes as Zuckerberg eliminates diversity, equity and inclusion programs at Meta and the Chan Zuckerberg Initiative. It also coincides with Zuckerberg defending Meta in an FTC antitrust trial over its acquisitions of Instagram and WhatsApp. Meanwhile, according to Washington Service, Zuckerberg was among several corporate insiders—alongside JPMorgan CEO Jamie Dimon—who sold large volumes of their companies’ shares in Q1, before Trump’s April tariff announcement roiled markets – knocking over 30% off Meta’s share price. (BI)(Bloomberg)(FT)(The Almanac)