US stocks tumbled on Monday following news that the Department of Justice has opened a criminal investigation into Federal Reserve Chair Jerome Powell, an apparent escalation of President Donald Trump’s attempts to influence the central bank.
The Dow Jones Industrial Average lost 444 points, or 0.9%, while the S&P 500 fell 0.3%. The Nasdaq Composite remained largely flat.
Trump’s call to cap credit card rates at 10% for one year also weighed on market sentiment, with critics warning that such a move could backfire by restricting lending and hurting both consumers and bank profitability. Bank shares led losses, with Citigroup down 3%, JPMorgan and Bank of America off more than 1%, and Capital One sliding 6%.
Powell addressed the probe in a direct video statement Sunday, saying: “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.” He stressed he would not bow to the pressure, with his term as chair set to expire in May.
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The Cboe Volatility Index ticked higher as traders sought protection. While the 2025 market largely ignored Trump’s earlier Fed pressures, the central bank is now expected to pause on further rate cuts, monitoring inflation and economic conditions.
