Dow, S&P 500, Nasdaq futures slide on Fed threat as Trump’s DOJ looks into criminal investigation

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Dow, S&P 500, Nasdaq futures slide on Fed threat as Trump’s DOJ looks into criminal investigation

U.S. stock futures added to losses early Monday amid concerns about the Federal Reserve’s independence after President Jerome Powell threatened criminal charges against him by the Trump administration.

Dow Jones Industrial Average futures (YM=F) fell 0.6%, while the S&P 500 (ES=F) sank 0.8%. The deal in the tech-heavy Nasdaq 100 (NQ=F) sent Wall Street stocks down 1.1% on the heels of record closing highs.

Investors were spooked late Sunday after Powell released a statement disclosing the Justice Department’s submission to the U.S. Federal Reserve.

In a rare video, Powell said, “The Justice Department served the Federal Reserve with grand jury subpoenas, threatening criminal charges related to my testimony before the Senate Banking Committee last June.”

Powell suggested that the move was a direct attack on the Fed for setting interest rates that “served the public” rather than “following the president’s priorities.”

Trump’s spat with the Fed chair has escalated significantly as markets brace for the latest consumer inflation report, due on Tuesday. The release comes on the heels of Friday’s December jobs report, which showed continued cooling in the labor market without signaling a sharp economic slowdown.

Taken together, the data bolstered expectations that the Federal Reserve will remain on hold for now, with CME FedWatch giving a 95% chance that rates will remain unchanged.

Beyond the economic calendar, geopolitical developments remain a wildcard. Trump is weighing possible action with Iran as he ramps up pressure on Cuba over Venezuelan oil shipments. Late last week, Trump also renewed controversial comments about Greenland, saying the US could control the Danish territory “whether they like it or not”.

Investors are now turning their attention to the first major catalysts of 2026: earnings season and key inflation data. Several of Wall Street’s biggest banks are set to report 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

  • Dollar falls by 3 weeks after Fed receives subpoenas

    Bloomberg reports:

    The dollar (DX-Y.NYB) fell the most in nearly three weeks as the Federal Reserve faced a grand jury subpoena from the Justice Department, reviving concerns about political interference in monetary policy.

    The Bloomberg Dollar Spot Index fell 0.3% on Monday, its biggest drop since Dec. 23. Fed Chairman Jerome Powell revealed that grand jury subpoenas had been served threatening him with criminal charges related to June testimony on the central bank’s headquarters renovation.

    … The rising tensions have fueled concerns over central bank autonomy, potentially fueling the bullish options sentiment seen earlier in the year. The dollar opened 2026 with a strong bias, especially against the euro, a marked change from December’s dynamics. This makes short-term positions vulnerable to further unwinding amid recent developments.

    The dollar’s status as the world’s reserve currency depends on institutional confidence, Nigel Green, chief executive officer of financial-advisory firm deVere Group, wrote in a note. “History teaches that countries that allow political leaders to dominate central banks pay a heavy economic price.”

    Read more here.

  • Analyst reactions to DOJ investigation into Powell

    Reuters sourced the following comments from analysts and investors about the Trump administration’s move against Federal Reserve Chairman Jerome Powell:

    Vishnu Varathan, Head of Macro Research, Asia Ex-Japan, Mizuho, ​​Singapore

    “The Fed independence question is now well and alive and subject to re-evaluation perhaps every few meetings.

    “I think I still don’t know how sustained and adversarial the attack on the Fed can be. There could be a scenario where Trump still appoints someone with some credibility and allows this person to run the show — so that’s probably why the markets aren’t panicking yet.”

    Andrew Lilly, Chief Rate Strategist at Barrenzoi, Sydney

    “Trump is pulling at the loose threads of central bank independence. I don’t even believe he expects Chair Powell to be charged … The only reason he’s taking these steps is because he knows he’s not going to take control of the Fed, so he wants to apply as much unnecessary pressure as possible.

    “It’s not good. Don’t get me wrong, but I think it’s going to be nothing. Investors won’t be happy about it, but it really shows that Trump doesn’t have any other levers to pull. The cash rate will stay where the majority of the FOMC wants them.”

  • Gold hits record high as Fed independence comes into focus

    Bloomberg reports:

    Read more here.

  • Jerome Powell announced that the DOJ had submitted to the Federal Reserve

    Bloomberg reports:

    Read more here.

  • Trump says CEO comments may keep ExxonMobil out of Venezuela due to personal feelings

    The Associated Press reports:

    Read more here.

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