Market Indexes Tank Again, but Gold Continues to Shine

Monday, April 21, 2025

Market indexes closed off their intra-session lows this Monday… but that’s about the extent of the good news for equities. The Dow closed -971 points today, -2.48%, while the S&P 500 dropped -124 points, -2.36%. The tech-heavy Nasdaq fared worst of the major averages: -415 points, -2.55%, and the small-cap Russell 2000 lost -42 points, -2.27%.

Ahead of the open we were also trading in the red, but indexes had been climbing toward a brighter outcome a half hour prior to the bell. Investors were keeping their eyes and ears open for possible trade deals announced after a week-plus of paused trade tariffs, but none have yet been forthcoming.

Instead, we got President Trump verbally attacking Fed Chair Jerome Powell again, 10 minutes after the regular trading session started, along with a demand for the Fed to start cutting interest rates “NOW.” This seemed to rip confidence in the markets fairly steadily throughout the day, bottoming out a half hour before the close, down between -3.00% and -3.65% before trending northward to end the session.

We see that the mere threat of getting rid of the Fed Chair (before his term ends in May of next year) has the capacity to roil the markets amid current conditions. Not only do we still have the draconian tariff levels to concern ourselves with the week after Independence Day, but with inflation data remaining above the Fed’s optimal 2%, either cutting rates in the near term or replacing Powell with a Fed Chair who will is sounding a warning bell among discerning investors.
 

Meanwhile, Gold Hits New All-Time High

The Gold Continuous Contract (COMEX) closed today’s session up +3.3% today to a current spot price of $3426 per ounce — new record-high levels. Keep in mind it was only a little more than a year ago that the COMEX hit $2K per ounce for the first time. 

There are plenty of possible explanations for this development, including Chinese investors willfully avoiding U.S. equities and treasuries as its trade war with the U.S. marches on. Gold prices are also on a divergent path from the U.S. federal deficit. Gold prices are also being assisted by a falling U.S. dollar — a fact that’s also helping the Euro and Bitcoin make gains on the day.

Zacks Strategist Jeremy Mullin told me, “Not sure where bond yields have to go to draw dollar buying, but it seems far off.” Jeremy also suggests the gold trade may be close to near-term exhaustion, and if we cross-reference gold miners, this bears out: Barrick Gold GOLD, Newmont NEM and Anglogold AU are all off highs reached last week.

What to Expect from the Stock Market Tomorrow

No major economic reports are due out Tuesday, but we will hear from Fed Presidents Harker, Barkin and Kashkari for some nuance on Fed policy following Powell’s comments last week. We were going to suggest we wouldn’t hear much divergence from Powell’s comments, as per normal, the amount of flak the Fed Chair has taken from the White House as a result of his stance may behoove the Fed presidents to tread a bit more lightly.

For Q1 earnings, we see plenty of big names reporting Tuesday: 3M MMM, Lockheed Martin LMT, GE Aerospace GE, Capital One COF, among others. But the big name tomorrow is Tesla TSLA which reports after the closing bell. The Zacks Rank #4 (Sell)-based company is expected to lose -2.22% on earnings per share year over year while gaining +0.95% in revenues. The EV major has missed earnings estimates in five of its last six quarters, and its share price has hemorrhaged -43% since the start of the year.

Check out the updated Zacks Earnings Calendar here.

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