U.S. stock futures fell late Sunday as Wall Street reacted to the Trump administration’s opening of a criminal investigation into Federal Reserve Chairman Jerome Powell.
Dow Jones Industrial Average futures (YM=F) fell 0.5% and S&P 500 futures (ES=F) fell 0.6%. Contracts related to the Nasdaq 100 (NQ=F) fell 0.9%.
Investors were rattled by a statement late Sunday from Federal Reserve Chairman Jerome Powell revealing that the Justice Department had subpoenaed the U.S. central bank.
“The Department of Justice issued a grand jury subpoena to the Federal Reserve, threatening criminal prosecution for my testimony before the Senate Banking Committee last June,” Powell said in an unusual video address.
Powell claimed the move was a direct attack on rate setting that “serves the public” rather than “follows the president’s preferences.”
It’s been a volatile start for stocks after last week’s strong close, when stocks climbed to new all-time highs. The S&P 500 (^GSPC) and the Dow Jones Industrial Average (^DJI) closed at new highs on Friday, extending gains that pushed the S&P 500 up more than 1% for the week. The Dow and Nasdaq Composite Index (^IXIC) posted stronger gains, rising 2.3% and 1.9% respectively.
The sharp escalation in Trump’s feud with the Fed chairman comes as markets prepare for the latest consumer inflation report due on Tuesday. The report comes on the heels of Friday’s December jobs report, which showed the labor market continues to cool but stopped short of signaling a sharp slowdown in the economy.
Taken together, the data reinforce expectations that the Fed will keep rates on hold for now, with CME FedWatch giving a 95% chance of keeping rates unchanged.
Beyond the economic calendar, geopolitical developments remain an uncertain factor. President Trump is reportedly considering potential actions involving Iran while also increasing pressure on Cuba over Venezuelan oil shipments. Late last week, Trump also made another controversial statement about Greenland, saying the United States could pursue control of the Danish territory “whether they like it or not.”
Investors are now turning their attention to the first major catalyst in 2026: earnings season and key inflation data. Several of Wall Street’s biggest banks will report earnings in the coming days, including JPMorgan Chase (JPM), Bank of America (BAC), Wells Fargo (WFC), Citigroup (C), Goldman Sachs (GS) and Morgan Stanley (MS).
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