Markets pull back from record highs
U.S. stocks traded unevenly Monday as investors digested rising political pressure on the Federal Reserve, shaking confidence in the central bank’s independence.
The Dow Jones Industrial Average slipped below flatline levels, while the S&P 500 edged modestly higher. The tech-heavy Nasdaq Composite rose about 0.2% after recently closing at record highs.
All three major indexes opened lower before trimming losses later in the session.=
DOJ probe rattles investor confidence
Market volatility followed confirmation that the Department of Justice has opened a criminal investigation involving Jerome Powell, related to testimony concerning Federal Reserve building renovations.
Powell responded forcefully, warning that the investigation represents an escalation of political pressure on the central bank. He said the inquiry threatens the Fed’s ability to set interest rates based on economic data rather than political influence.
Investors viewed the development as a significant challenge to monetary policy independence, amplifying uncertainty across financial markets.
Safe-haven assets surge
Concerns over institutional stability drove a sharp move into precious metals.
- Gold surged to new intraday highs, trading above $4,600 per ounce
- Silver jumped roughly 8%, pushing above $85 per ounce
- Broader strength lifted platinum and palladium as well
The U.S. dollar weakened, further supporting the rally in metals as investors sought protection from political and market risk.
Bank stocks slide on regulatory warning
Financial stocks came under pressure after comments signaling stricter oversight of consumer lending practices.
Shares of Capital One fell sharply, while Citigroup and JPMorgan Chase also declined ahead of the start of earnings season for major U.S. banks.
The sector’s weakness added to broader market caution as investors reassessed regulatory and policy risk.
All eyes turn to inflation data
Markets are now focused on upcoming economic releases, particularly the December Consumer Price Index (CPI) report due Tuesday.
Following last week’s jobs report, futures markets are largely pricing in no interest-rate cut at the Federal Reserve’s next meeting, though expectations for later in the year remain fluid.
WSA Take
This isn’t just a headline-driven dip — it’s a credibility test for U.S. institutions. Any perception that monetary policy is being politicized tends to drive capital toward hard assets and away from risk-sensitive sectors like financials. For investors, the message is clear: volatility is no longer just about earnings or inflation — governance risk is back on the table.
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