Why Alphabet Stock Is Sinking Today

Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG) stock is losing ground in Monday's trading. The company's share price was down 3% as of 3:15 p.m. ET amid a 3.2% decline for the S&P 500 and a 3.4% fall for the Nasdaq Composite.

The stock market is selling off today after President Donald Trump made intensely critical remarks about Federal Reserve Chair Jerome Powell. Alphabet stock is getting caught up in the broader pullback amid investors' bearish reaction to the possibility that the Trump administration will try to fire Powell and exert more control over the Fed.

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Alphabet stock slips as Trump's Fed comments roil the market

Kevin Hassett, the director of the National Economic Council, said last Friday that the Trump administration was looking into whether it had the legal authority to fire Powell before the end of his term in 2026. Today, Trump described Powell as a "major loser" and called for preemptive interest rate cuts to energize the U.S. economy. The Federal Reserve is typically supposed to operate independently from the federal government, and investors are worried about uncertainty and potential fallout from shakeups at the central banking authority.

What's next for Alphabet?

Despite the volatile macroeconomic and geopolitical backdrop, many analysts remain bullish on Alphabet stock. In a note published this morning, Roth Capital lowered its one-year price target on Alphabet from $220 per share to $180 per share but reiterated a buy rating on the stock. The firm expects that the tech giant's growth rate will decelerate in the near term, but its new price target still implies upside of roughly 23% as of this writing.

Following today's sell-off, Alphabet stock is now trading at under 16.5 times this year's expected earnings. While its current valuation looks cheap in the context of the company's strengths and long-term potential, macroeconomic and geopolitical dynamics open the door for more big volatility in the near term.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.