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Dow Jones Industrial Average futures fell by 199 points. S&P 500 futures declined by 0.5%, while Nasdaq-100 futures lost 0.7%. According to analysts, investors reduced some risks in the new and more tense phase of the standoff between Trump and the Fed.

In an unusual direct video statement on Sunday evening, Powell confirmed that federal prosecutors had opened a criminal investigation related to his testimony before the Senate Banking Committee regarding the renovation of Fed office buildings.

Powell said the investigation was another attempt by Trump to influence the central bank’s monetary policy and that he would not bow to pressure. His term as chair ends in May.

In his statement, Powell said, “This is about whether the Fed can continue to set interest rates based on evidence and economic conditions, or whether monetary policy will instead be guided by political pressure or intimidation.”

The Cboe Volatility Index, considered Wall Street’s fear gauge, rose in early trading after news of the Powell investigation, reflecting increased demand for protection in the options market.

Jay Woods, chief market strategist at Freedom Capital Markets, said, “The market has seen this before and didn’t like it. Right now, the issue isn’t Powell — it’s the Fed’s independence. When news like this breaks, the first reaction is to sell.”

In 2025, U.S. stock markets largely ignored Trump’s efforts to pressure the Fed, as the central bank continued to cut interest rates three times amid stabilizing inflation.

However, the Fed is expected to pause rate cuts at its next meeting later this month, as it waits to see how inflation and the economy develop in the new year. Trump has made it clear that he wants the Fed to continue lowering rates.

Gold futures, seen as a hedge against a decline in the Fed’s independence, rose by 2% in early trading. According to analysts, investors are concerned that a politicized Fed may hesitate to rein in resurgent inflation.

Trump’s call to cap credit card interest rates at 10% for one year also caused some unease in markets earlier this week. Critics worry that his plan to boost affordability could backfire by restricting credit and hurting consumers and bank profitability.

JPMorgan Chase, Bank of America, Morgan Stanley and Goldman Sachs are scheduled to report quarterly earnings this week. Analysts say these results will provide investors with fresh insights into consumer spending, deal activity and trading revenues.