U.S. equity index futures extended losses on Monday as concerns mounted over the independence of the Federal Reserve, following confirmation that the Justice Department has opened a criminal investigation into testimony by Fed Chair Jerome Powell regarding cost overruns tied to a $2.5 billion renovation of the central bank’s Washington headquarters.
By 05:50 ET, Dow Jones futures were down 360 points, or 0.7%, S&P 500 futures had fallen 46 points, or 0.7%, and Nasdaq 100 futures were lower by 220 points, or 0.9%.
The pullback comes after a strong end to last week, when both the S&P 500 and the Dow Jones Industrial Average closed at record highs. Over the week, the S&P 500 gained more than 1%, while the Dow and the Nasdaq Composite rose 2.3% and 1.9%, respectively.
Powell faces escalating scrutiny
Late Sunday, Powell said federal prosecutors had launched a criminal probe linked to his Senate Banking Committee testimony on the Fed’s building renovation. He suggested, however, that the investigation reflects political pressure from the Trump administration, which has repeatedly urged the central bank to cut interest rates aggressively.
“This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings… This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions—or whether instead monetary policy will be directed by political pressure or intimidation,” Powell said.
The remarks mark Powell’s most direct response yet to mounting political pressure on the Fed. President Donald Trump has repeatedly called for rate cuts of at least 2% over the past year, while the Fed delivered total reductions of 0.75% in 2025, citing persistent inflation and uncertainty stemming from Trump’s trade policies.
The standoff between the White House and the Fed comes as Powell’s term is due to end in May. Trump said last week that he is close to naming a successor.
“Powell has explicitly characterised this as an attack on the Fed’s independence from the Trump administration,” analysts at ING said in a note. “Markets’ initial reaction agreed with that view. The combined drop in the dollar, equities and Treasuries was a reminiscence of the ’sell America’ days of last spring.”
Inflation data in focus
Attention now turns to a heavy slate of U.S. economic data, led by Tuesday’s release of the December consumer price index. Headline inflation is expected to remain steady, while core CPI is forecast to tick slightly higher.
The data follows a softer-than-expected November inflation print, which analysts suggested may have been distorted by disruptions from a prolonged government shutdown late in 2025.
Markets are largely pricing in no change to interest rates at the Fed’s January meeting, after policymakers signaled a higher hurdle for further easing this year. Producer price data, retail sales figures and comments from several Federal Reserve officials are also due in the days ahead.
Banks kick off earnings season
The fourth-quarter earnings season begins in earnest this week, with results from major U.S. banks set to take center stage.
JPMorgan Chase (NYSE:JPM) and Bank of New York Mellon (NYSE:BK) are scheduled to report on Tuesday, followed by Bank of America (NYSE:BAC), Wells Fargo (NYSE:WFC) and Citigroup (NYSE:C) on Wednesday. Later in the week, Morgan Stanley (NYSE:MS), Goldman Sachs (NYSE:GS) and BlackRock (NYSE:BLK) are due to publish results.
Investors will be watching closely to assess how companies navigated economic disruption from the government shutdown and ongoing geopolitical tensions in the final quarter of 2025.
Ahead of the reports, financial stocks came under pressure after Trump renewed calls for a one-year cap on credit card interest rates. In a social media post on Saturday, the president said he wants to impose a 10% ceiling on annual percentage rates starting January 20, arguing that consumers are being “ripped off” by rates in the 20%–30% range.
Gold hits records; oil steadies
Elsewhere, gold surged to fresh record highs as investors sought safe-haven assets amid rising unrest in Iran, political pressure on the U.S. central bank and signs of weakness in U.S. labor data.
Spot gold climbed as much as 2% to a record $4,601.17 an ounce and was last trading up 1.8% at $4,592.84. A weaker U.S. dollar added to the metal’s appeal by making it cheaper for non-dollar buyers.
Oil prices, meanwhile, consolidated after recent gains. Ongoing civil unrest in Iran — a major Middle Eastern producer — has raised concerns about potential supply disruptions.
Brent crude futures slipped 0.5% to $63.05 a barrel, while U.S. West Texas Intermediate fell 0.3% to $58.77. Both benchmarks rose more than 3% last week as anti-government protests in Iran escalated into the largest demonstrations against the country’s clerical leadership since 2022, heightening fears of broader regional instability.
Bank of New York Mellon Corporation stock price