Wall Street and the dollar tumble as investors retreat further from the United States

NEW YORK (AP) — Wall Street weakened Monday as investors worldwide get more skeptical about U.S. investments because of President Donald Trump’s trade war and his criticism of the Federal Reserve, which are shaking the traditional order.

The S&P 500 sank 2.4% in another wipeout. That yanked the index that’s at the center of many 401(k) accounts 16% below its record set two months ago.

The Dow Jones Industrial Average dropped 971 points, or 2.5%, while losses for Tesla and Nvidia helped drag the Nasdaq composite down 2.6%.

Perhaps more worryingly, U.S. government bonds and the value of the U.S. dollar also sank as prices retreated across U.S. markets. It’s an unusual move because Treasurys and the dollar have historically strengthened during episodes of nervousness. This time around, though, it’s policies directly from Washington that are causing the fear and potentially weakening their reputations as some of the world’s safest investments.

Trump continued his tough talk on global trade as economists and investors continue to say his stiff proposed tariffs could cause a recession if they’re not rolled back. U.S. talks last week with Japan failed to reach a quick deal that could lower tariffs and protect the economy, and they’re seen as a “test case,” according to Thierry Wizman, a strategist at Macquarie.

“The golden rule of negotiating and success: He who has the gold makes the rules,” Trump said in all capitalized letters on his Truth Social Network. He also said that “the businessmen who criticize tariffs are bad at business, but really bad at politics,” likewise in all caps.

Trump has recently focused more on China, the world’s second-largest economy, which has also been keeping up its rhetoric. China on Monday warned other countries against making trade deals with the United States “at the expense of China’s interest” as Japan, South Korea and others try to negotiate agreements.

“If this happens, China will never accept it and will resolutely take countermeasures in a reciprocal manner,” China’s Commerce Ministry said in a statement.

Also hanging over the market are worries about Trump’s anger at Federal Reserve Chair Jerome Powell. Trump last week criticized Powell again for not cutting interest rates sooner to give the economy more juice.

The Fed has been resistant to lowering rates too quickly because it does not want to allow inflation to reaccelerate after slowing nearly all the way down to its 2% goal from more than 9% three years ago.

Trump talked Monday about a slowdown for the U.S. economy that could be coming unless “Mr. Too Late, a major loser, lowers interest rates, NOW.”

A move by Trump to fire Powell would likely send a bolt of fear through financial markets. While Wall Street loves lower rates, largely because they boost stock prices, the bigger worry would be that a less independent Fed would be less effective at keeping inflation under control. Such a move could further weaken, if not kill, the United States’ reputation as the world’s safest place to keep cash.

All the uncertainty striking pillars at the center of financial markets means some investors say they’re having to rethink the fundamentals of how to invest.

“We can no longer extrapolate from past trends or rely on long-term assumptions to anchor portfolios,” strategists at BlackRock Investment Institute said in a report. “The distinction between tactical and strategic asset allocation is blurred. Instead, we need to constantly reassess the long-term trajectory and be dynamic with asset allocation as we learn more about the future state of the global system.”

That in turn could push investors outside the United States to keep more of their money in their home markets, according to the strategists led by Jean Boivin.

On Wall Street, Big Tech stocks helped lead indexes lower ahead of their latest earnings reports due later this week.

Tesla sank 5.7%. The electric vehicle maker’s stock has more than halved from its record set in December on criticism that the stock price had gone too high and that CEO Elon Musk’s role in leading the U.S. government’s efforts to cut spending is damaging the brand.

Nvidia fell 4.5% for a third straight drop after disclosing that U.S. export limits on chips to China could hurt its first-quarter results by $5.5 billion.

They led another wipeout on Wall Street, and 92% of the stocks within the S&P 500 fell.

Among the few gainers were Discover Financial Services and Capital One Financial, which climbed after the U.S. government approved their proposed merger. Discover rose 3.6%, while Capital One added 1.5%.

All told, the S&P 500 fell 124.50 points to 5,158.20. The Dow Jones Industrial Average dropped 971.82 to 38,170.41, and the Nasdaq composite tumbled 415.55 to 15,870.90.

Gold also climbed to burnish its reputation as a safe-haven investment, unlike some others.

In the bond market, shorter-term Treasury yields fell as investors expect the Fed to cut its main overnight interest rate later this year to support the economy.

But longer-term yields rose with doubts about the United States’ standing in the global economy. The yield on the 10-year Treasury climbed to 4.40%, up from 4.34% at the end of last week and from just about 4% earlier this month. That’s a substantial move for the bond market.

The U.S. dollar’s value, meanwhile, fell against the euro, Japanese yen, the Swiss franc and other currencies.

AP Business Writer Elaine Kurtenbach contributed.

Trader Michael Capolino works on the floor of the New York Stock Exchange, Monday, April 21, 2025. (AP Photo/Richard Drew)

Trader Robert Arciero works on the floor of the New York Stock Exchange, Monday, April 21, 2025. (AP Photo/Richard Drew)

Trader Steven Gohl works on the floor of the New York Stock Exchange, Monday, April 21, 2025. (AP Photo/Richard Drew)

Trader Thomas McCauley works on the floor of the New York Stock Exchange, Monday, April 21, 2025. (AP Photo/Richard Drew)

Trader John Bishop, left, works with colleagues on the floor of the New York Stock Exchange, Monday, April 21, 2025. (AP Photo/Richard Drew)

Trader Sal Suarino works on the floor of the New York Stock Exchange, Monday, April 21, 2025. (AP Photo/Richard Drew)

A board above the trading floor of the New York Stock Exchange shows the closing number for the Dow Jones industrial average, Thursday, April 17, 2025. (AP Photo/Richard Drew)

Currency traders work near a screen showing the Korea Composite Stock Price Index (KOSPI), top left, and the foreign exchange rate between U.S. dollar and South Korean won, top center, at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Monday, April 21, 2025. (AP Photo/Ahn Young-joon)

Currency traders watch monitors near a screen showing the Korea Composite Stock Price Index (KOSPI), top left, and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Monday, April 21, 2025. (AP Photo/Ahn Young-joon)

A currency trader works near a screen showing the Korea Composite Stock Price Index (KOSPI), top left, and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Monday, April 21, 2025. (AP Photo/Ahn Young-joon)

TUSCALOOSA, Ala. (AP) — President Donald Trump was set to address graduating students at the University of Alabama on Thursday, a visit that drew hundreds of protesters to an off-campus rally.

Trump’s evening remarks in Tuscaloosa will be the Republican president’s first address to graduates in his second term and will come as he has been celebrating the first 100 days of his administration. The visit came shortly after he announced a shake-up to his national security team, with Mike Waltz being tapped for United Nations ambassador and Secretary of State Marco Rubio taking over Waltz's national security adviser role on an interim basis.

The White House offered no details about Trump’s planned message to graduates.

Alabama, where Trump won a commanding 64% of the vote in 2024, is where he has staged a number of his trademark large rallies over the past decade. It is also where Trump showed early signs of strength in his first presidential campaign when he began filling stadiums for his rallies.

While Trump has described the speech as a commencement address, it is actually a special event that was created before graduation ceremonies that begin Friday. Graduating students have the option of attending the event.

Former Crimson Tide football coach Nick Saban is also speaking.

Ahead of the president's arrival, cap-and-gown-wearing graduates and their families began filing into the arena where Trump was set to speak. Many seemed excited about the prospect of seeing him in person.

Emily Appel, a 22-year-old advertising major from Norcross, Georgia, called Trump's appearance at their school “a cherry on top” of her college years.

“I think it’s such an honor, no matter who the president is. I think this is a huge honor to have the president of the United States speaking to our school," Appel said.

She called Trump a “very influential person” and said she hoped he had a message to share that was "positive about us being able to work in the real world and for our future.”

Sophie Best, who is graduating with a communications degree, said, “I don’t think that we could have had a greater person come to speak."

The 21-year-old from Cartersville, Georgia, said she attended Trump's first presidential inauguration in 2017 when she was a freshman in high school, along with her father, who she said loves Trump.

“I think that no matter what political party or whatever you believe in, I think that it’s super cool that we get to experience and make history and be a part of this,” she said.

At a park several miles away, hundreds of people gathered at a counter rally hosted by College Democrats. One-time presidential candidate Beto O’Rourke of Texas and former U.S. Sen. Doug Jones, the last Democrat to hold statewide office in Alabama, were slated to address the rally, called a “Tide Against Trump” — a play on the university’s nickname.

Aidan Meyers, a 21-year-old junior studying biology at the university, said he felt betrayed by the decision to let Trump speak at a graduation-related event.

“I felt betrayed that the university was willing to put up with someone who has made it clear that they hate academia, essentially holding funding above universities' heads as a bargaining chip, unless they bow down to what he wants, which is kind of a hallmark sign with fascist regime,” Meyers said.

He said he also feels betrayed by the administration’s stance on science and research. A fellowship he was seeking at the National Institutes of Health was canceled because of the federal hiring freeze, he said.

O'Rourke praised the students who invited him as “inspiring” and said their efforts in a Republican-dominated state like Alabama are an example for the rest of the country.

“You cannot be too red or too rural or too Republican to be written off right now. You also can't be too blue or too liberal to be taken for granted,” O’Rourke told The Associated Press after arriving in Tuscaloosa. “You've got to show up absolutely everywhere. We truly are in crisis.”

Trump’s presence has also drawn criticism from the Alabama NAACP, which said his policies are hurting universities and students, particularly students of color.

Trump's visit to Alabama is his second trip this week. He held a rally in Michigan on Tuesday to mark 100 days in office.

Outside of weekend trips for personal visits, the president has not made many official trips since taking office on Jan. 20. He usually speaks to the public from the impromptu news conferences he holds in the Oval Office and at other events at the White House.

After his stop in Alabama, Trump is scheduled to travel to Florida for a long weekend at his Mar-a-Lago resort.

Later this month, he is scheduled to give the commencement address at the U.S. Military Academy in West Point, New York.

Associated Press writer Bill Barrow contributed to this report from Atlanta.

President Donald Trump walks with Air Force Col. Angela Ochoa, Commander of the 89th Airlift Wing from Marine One to board Air Force One at Joint Base Andrews, Md., en route Tuscaloosa National Airport, Thursday, May 1, 2025. (AP Photo/Manuel Balce Ceneta)