April 21 (Reuters) - U.S. stock index futures dropped on Monday, as President Donald Trump's attacks on Federal Reserve Chair Jerome Powell sparked worries about the central bank's independence, rattling investors already grappling with an escalating trade war.
On Friday, White House economic adviser Kevin Hassett said that Trump and his team would study whether firing the Fed Chair was an option.
That followed Trump's comments on Thursday that Powell's "termination cannot come fast enough," as the President renewed his calls for more interest-rate cuts.
The continued attacks on Powell increased worries about the Fed's independence in deciding the path of monetary policy in the world's largest economy, hitting investor confidence in U.S. assets already diminished by Trump's sweeping changes to trade policy.
"While monetary policy is a relatively blunt weapon, it can be wielded to control medium-term inflation. This depends on trust in the central bank," said Paul Donovan, chief economist, UBS Global Wealth Management.
"Building that trust takes years. Losing that trust can happen overnight."
At 06:48 a.m. ET, Dow E-minis were down 344 points, or 0.87%, S&P 500 E-minis were down 53.75 points, or 1.01%, and Nasdaq 100 E-minis were down 209.25 points, or 1.14%.
Futures linked to the small-cap Russell 2000 lost 0.8%, while the CBOE Volatility Index (.VIX), - Wall Street's "fear gauge" - rose more than 2.5 points.
Trading volumes were relatively thin as investors returned from the Good Friday market holiday. The dollar slid against major peers and safe-haven gold jumped.
Gold miners were higher in premarket trading, with Newmont (NEM.N), rising 2.8% and U.S.-listed shares of Barrick Gold (ABX.TO), up 3.6%.
Most megacap and growth stocks were lower. Tesla (TSLA.O), fell 2.5% after a Reuters report said the launch of the EV-maker's cheaper Model Y car was delayed.
Nvidia (NVDA.O), was last down 3.2% after Reuters reported that Huawei Technologies planned to begin mass shipments of an advanced AI chip to Chinese customers as early as next month.
Traders are now pricing in nearly a full percentage point of rate cuts from the Fed this year, according to LSEG data.
Tariff concerns continued to feature prominently on investors' radar after China warned countries against striking a broader economic deal with the United States at Beijing's expense.
Fed policymakers have recently flagged that tariff uncertainty was clouding their outlook and dampening growth amid Trump's repeated calls for lower interest rates.
The uncertainty over trade and monetary policies has hit stocks hard this year, with the S&P 500 (.SPX), down more than 10% this year and 14% from the record high it hit in February.
Company results will be keenly watched this week for clues on how corporations are navigating uncertainty as Tesla (TSLA.O), and Alphabet (GOOGL.O), kick off earnings for the "Magnificent Seven" megacap stocks.
Netflix (NFLX.O), shares rose 3.2% following an upbeat revenue outlook from the streaming giant despite possible economic turbulence.
Capital One Financial (COF.N), gained 4.1% after U.S. banking regulators said on Friday that they had approved its $35.3 billion purchase of Discover Financial Services (DFS.N), opens new tab.
Reporting by Lisa Mattackal and Purvi Agarwal in Bengaluru; Editing by Anil D'Silva and Pooja Desai
