Stock futures pointed sharply lower and safe-haven gold hit a new all-time high Monday after the Justice Department opened a criminal probe into Federal Reserve Chair Jerome Powell.
Last night, Powell wrote that the U.S. Department of Justice had served the central bank grand jury subpoenas on Friday regarding his Senate Banking Committee testimony last year over plans to renovate Fed office buildings. “The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President,” Powell wrote.
Nasdaq 100, Dow Jones Industrial Average, and S&P 500 futures dropped a respective 0.8%, 0.7%, and 0.6% in response. Major stock indexes had ended sharply higher Friday, with the Dow Jones Industrial Average and S&P 500 setting closing records, after the U.S. unemployment rate declined more than expected in December.
Gold futures, considered a haven during market turbulence, crossed $4,600 an ounce for the first time early Monday.
The 10-year Treasury yield, which influences interest rates on a variety of commercial and consumer loans, rose to 4.20% from around 4.17% at Friday’s close.
Bitcoin was trading around $90,400, down slightly on the day. The U.S. dollar index, which tracks the value of the greenback against a basket of foreign currencies, was down 0.3% to 98.81.
West Texas Intermediate futures, the U.S. crude oil benchmark, were down 0.6% to $58.80 a barrel.
Shares of several credit card issuers sank after President Donald Trump wrote on his Truth Social network that on Jan. 20, the one-year anniversary of his administration, he was “calling for a one year cap on Credit Card Interest Rates of 10%.” Capital One Financial (COF) stock dropped 10% before the bell, Citigroup (C) was down 4%, and shares of JPMorgan Chase (JPM), American Express (AXP), Bank of America (BAC) and Wells Fargo (WFC) were down more than 2% apiece.
Exxon Mobil (XOM) shares slipped more than 1% after President Trump said he’d “probably be inclined to keep Exxon out” of Venezuela following comments by CEO Darren Woods that the country was currently “uninvestible.”
Shares of Sun Country Airlines Holdings (SNCY) soared 17% and those of Allegiant Travel Company (ALGT) advanced 3% after Allegiant agreed to buy its rival budget carrier for $1.5 billion in order to create what it called “a leading, more competitive leisure-focused U.S. airline.”