Markets shrug off Powell investigation headlines
U.S. stocks edged higher on Monday as gains in technology shares and Walmart helped investors look past concerns surrounding a potential criminal investigation into Federal Reserve Chair Jerome Powell. The S&P 500 touched a new intraday record, supported by strength in large-cap tech and retail.
Technology stocks climbed 0.8%, leading sector gains, while Walmart shares jumped 2.7%. The retailer’s recent move of its stock listing from the NYSE to the Nasdaq added momentum, ahead of its inclusion in the Nasdaq-100 index on January 20, a shift expected to attract significant passive investment flows.
Justice Department probe fails to rattle investors
Stocks opened lower earlier in the session after reports that the U.S. Justice Department had threatened to indict Powell over his congressional testimony related to a Federal Reserve building renovation project. Powell described the move as a pretext aimed at exerting greater political influence over monetary policy.
Market reaction remained muted. Investors largely viewed the situation as well-telegraphed political pressure rather than a material risk to financial stability or near-term policy decisions.
Financial stocks lag amid rate cap proposal
While broader indexes moved higher, financial stocks underperformed. The sector fell 1.2% after President Donald Trump called for a one-year cap on credit card interest rates at 10%, beginning January 20. The proposal weighed heavily on banks and consumer finance companies.
Citigroup fell 3.4%, American Express dropped 4.4%, and Capital One slid 7.4%. JPMorgan Chase shares declined 2%, while buy-now, pay-later provider Affirm Holdings lost 5.6%.
Earnings season and inflation data in focus
Investors are now turning their attention to the fourth-quarter earnings season, which unofficially begins Tuesday with results from JPMorgan and other major banks. Corporate guidance is expected to play a key role in shaping near-term market sentiment.
Markets are also bracing for the release of the U.S. consumer price index report on Tuesday. The data could influence expectations for Federal Reserve interest rate cuts, with futures markets currently pricing in at least two quarter-point reductions before the end of the year.
Indexes close modestly higher
The Dow Jones Industrial Average closed nearly flat at 49,503.96. The S&P 500 gained 0.19% to 6,979.04, while the Nasdaq Composite rose 0.49% to 23,786.33.
Market breadth was positive, with advancing stocks outnumbering decliners on both the New York Stock Exchange and the Nasdaq.
