BY MIRABEL ODETA
Wall Street futures moved lower on Monday after the Trump administration renewed its attacks on the Federal Reserve, reviving concerns about the central bank’s independence and unsettling investors who had entered the year on a strong footing. Adding to the pressure, financial stocks came under sharp selling after President Donald Trump proposed a one-year cap on credit-card interest rates, a move that rattled lenders and consumer finance companies.
The administration escalated tensions by threatening to indict Federal Reserve Chair Jerome Powell over his congressional testimony related to a renovation project at the central bank. Powell pushed back strongly, describing the threat as a “pretext” aimed at exerting greater political control over monetary policy. Since returning to office in January 2025, Trump has repeatedly called for aggressive interest-rate cuts, arguing that looser policy is needed to support growth.
Market strategists said Powell’s unusually direct response underscored the seriousness of the situation. Elias Haddad, global head of markets strategy at Brown Brothers Harriman, noted that Powell has traditionally avoided engaging publicly with questions of political interference, but this time spoke candidly, highlighting the growing unease around the Fed’s ability to operate without political pressure.
Financial stocks were hit especially hard after Trump announced plans for a one-year cap on credit-card interest rates at 10%, set to begin on January 20. Major U.S. banks slid in premarket trading, with Citigroup dropping more than 4%, JPMorgan Chase falling nearly 3%, and Bank of America down over 2%. Credit-card and consumer finance companies suffered even steeper losses, as investors weighed the potential impact on profitability. American Express fell almost 5%, while Synchrony Financial, Bread Financial, and Capital One plunged between 8% and 11%.
The market weakness came despite a strong start to the year, with the S&P 500 and Dow Jones Industrial Average closing the first week of 2026 at record highs. Fourth-quarter earnings season is now moving into focus, beginning with JPMorgan Chase’s results on Tuesday, which investors hope will provide clarity on the health of the U.S. consumer and the broader economy.
By early morning in New York, S&P 500 E-mini futures were down 0.57%, Dow E-mini futures had slipped 0.71%, and Nasdaq 100 E-mini futures were lower by 0.79%, reflecting broad-based risk aversion across equity markets.
Several major banks, including JPMorgan, Barclays, Goldman Sachs, and Morgan Stanley, have recently postponed their calls for U.S. rate hikes after fresh data suggested the labor market is cooling but not deteriorating rapidly. Attention now turns to Tuesday’s U.S. consumer price inflation report, which is expected to play a crucial role in shaping expectations for the Federal Reserve’s next policy moves.
Goldman Sachs economist Jan Hatzius said the threat of legal action against Powell has intensified concerns about the Fed’s independence, even as he expects policymakers to continue relying primarily on economic data. Haddad added that downside risks to U.S. employment are still building, reinforcing the case for additional rate cuts later in the year.
Elsewhere in the market, U.S.-listed gold miners advanced after bullion prices surged past the psychological $4,600-per-ounce mark, reaching a record high for the first time this year. Harmony Gold jumped more than 6%, while Barrick Mining and Kinross Gold each gained about 3%, benefiting from renewed investor demand for safe-haven assets.
In corporate news, UnitedHealth Group shares slipped after reports that a U.S. Senate committee is probing the insurer’s practices, including allegations that it used aggressive methods to collect diagnoses that could boost Medicare Advantage payments. Energy stocks also faced pressure after Trump said he may block Exxon Mobil from investing in Venezuela, following comments by CEO Darren Woods describing the country as “uninvestable.” Exxon shares edged lower in premarket trading.
Retailer Walmart stood out on the upside, rising more than 3% after confirming it will join the Nasdaq-100 index on January 20, following its recent move from the New York Stock Exchange to the Nasdaq.
On the geopolitical front, Iran said it is keeping communication channels open with Washington even as Trump weighed potential responses to a violent crackdown on protests in the country. The president warned that military action remains an option if the violence against protesters continues, adding another layer of uncertainty to already jittery global markets.
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