U.S. stock futures fell further in early trade on Monday after Federal Reserve Chairman Jerome Powell said the Trump administration was threatening to criminally prosecute him, raising concerns about the central bank’s independence.
Dow Jones Industrial Average futures (YM=F) fell 0.6% and S&P 500 futures (ES=F) fell about 0.8%. Contracts on the tech-heavy Nasdaq 100 Index (NQ=F) led losses, falling 1.1% after Wall Street stocks hit a new closing high.
On Sunday evening, Powell rattled investors by issuing a statement 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 a rare video.
Powell said the move was a direct attack on the Fed setting interest rates to “serve the public” rather than “follow the president’s preferences.”
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. 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).
live 5 updates
