S&P 500 and Dow Jones: US Indices Mixed Today as Powell Probe Rattles Markets

Major U.S. Stock Indexes Mixed as Powell Criminal Probe Rattles Markets

The major U.S. stock indexes are mixed but mostly higher on Monday as we near the mid-session after opening lower on the news that the Department of Justice opened a criminal investigation into Federal Reserve Chair Jerome Powell. Stocks retreated from record highs at the end of last week. The move against Powell is being called an apparent escalation by President Trump in his attempt to pressure the central bank to lower interest rates.

Stocks Rebound Despite Opening Sell-Off

At 16:22 GMT, the blue chip Dow Jones Industrial Average is trading 49414.39, down 89.68 or -0.18%. The benchmark S&P 500 is at 6968.05, up 1.77 or +0.03%, and the tech-weighted Nasdaq is trading 23714.942, up 43.596 or +0.18%.

Powell Vows to Resist Trump Pressure as Criminal Probe Launched

Powell said on Sunday that federal prosecutors have opened a criminal investigation related to his Senate Banking Committee testimony on the renovation of Fed office buildings. Powell added that the investigation was another attempt by Trump to influence the central bank’s monetary policy and he would not bow to the pressure. His term as chair is up in May.

Former Fed Officials Rally Behind Powell, Condemn ‘Unprecedented’ Attack

Meanwhile, former officials said Trump is using ‘prosecutorial attacks’ to undermine the Fed. “The reported criminal inquiry into Federal Reserve Chair Jay Powell is an unprecedented attempt to use prosecutorial attacks to undermine that independence,” a statement backed by more than a dozen signatories said.

Gold (XAUUSD), which is seen as a hedge against diminishing Fed independence, jumped more than 2%. Investors fear a political Fed would be hesitant to snuff out resurgent inflation.

Consumer Staples Lead Gains While Financials Tumble on Trump’s Credit Card Cap Threat

Seven out of 11 sectors are edging higher on Monday, with the group led by Consumer Staples (+1.20%), followed by Materials (+0.78%) and Industrials (+0.49%).

The biggest loser is the financial sector, down 1.03%. Bank stocks drove this sector lower, including Citigroup down 3%. JPMorgan and Bank of America were off by more than 1%. Capital One shares slid 6%. Bank stocks were also capped by President Trump’s call for credit card rates to be capped at 10% for one year.

Walmart Surges on Nasdaq-100 Addition; Exxon Slides on Venezuela Threats

Story stocks include Walmart, which rose 3% after Nasdaq said the retailer would join the Nasdaq-100 index later this month. The stock could see more demand after joining the index, which is tracked by the popular Invesco QQQ Trust ETF.

Exxon Mobil was a drag on the energy sector after the company lost more than 1% in early trading after Trump threatened to block Exxon from Venezuela’s oil market. Trump said he didn’t like the company’s response to calls for energy companies to come back to the country. “They’re playing too cute,” he said.

S&P 500 Eyes New Record High After Clawing Back Losses

Technically, the March E-mini S&P 500 Index is in a strong position to make a new high after clawing back all of its earlier losses. Standing in the way is Friday’s all-time high at 7017.50. Major support is the uptrending angle at 6930.25, followed by the 50-day moving average at 6886.17.

More Information in our Economic Calendar.