U.S. Stocks End Monday with Gains
The Dow increased 0.17%, adding 86.13 points, to settle at 49,590.20.
The Nasdaq advanced 0.26%, rising 62.56 points, to conclude at 23,733.90, while the S&P 500 climbed 0.16%, gaining 10.99 points, to close at 6,977.27.
The Volatility Index (VIX), commonly referred to as the "fear index," surged 4.35% to reach 15.12.
Markets, which opened with losses driven by Fed independence concerns, reversed course to finish with gains.
Fed Chairman Jerome Powell revealed that the Justice Department delivered a grand jury subpoena to the Fed on Friday.
Powell stated he had been issued a threat of criminal prosecution, noting that "this unprecedented action should be seen in the broader context of the administration's threats and ongoing pressure."
Though the investigation was initiated concerning a $2.5 billion renovation project at the Fed's headquarters, Powell indicated he believes the criminal charge threat primarily relates to the central bank's monetary policy choices, emphasizing that he has executed his responsibilities free from political pressure.
Market experts characterized the development as a dramatic intensification in Trump's campaign to compel the Fed to reduce interest rates.
Previous leaders from earlier US economic administrations, including three former Fed chairmen, highlighted the critical nature of the Fed's independence for economic stability.
In their statement, they described the investigation as an unprecedented attempt, executed through the Washington, DC, prosecutor's office, to compromise that independence.
Coverage by US media outlets has suggested that Trump plans this week to interview Rick Rieder, an executive at asset management firm BlackRock, to assume control as the Fed's new chair.
In a message on his social media platform Truth Social, Trump warned that if the Supreme Court rules against his tariffs, the US would have to pay "hundreds of billions of dollars" in compensation, a figure he said could rise to trillions of dollars once lost investments are included.
On the business front, Trump's demand for a 10% cap on credit card interest rates for one year also triggered sell-offs in several banking stocks.
Shares of Wells Fargo and Bank of America declined approximately 1%, JPMorgan Chase slipped roughly 1.5%, Citigroup dropped around 3%, and Capital One plunged about 6%.
Financial analysts warned Trump's push to enhance affordability could produce unintended consequences and damage consumers and bank profitability by constraining lending.
Apple shares increased 0.3% after the technology company revealed that its next-generation AI infrastructure would be developed based on Google's Gemini model and cloud technology.
Following the announcement, Alphabet, Google's parent company, briefly reached a market value of $4 trillion.
Additionally, Nvidia and Eli Lilly disclosed they would invest $1 billion over five years on a joint research laboratory. While Nvidia's shares remained flat, Eli Lilly's shares gained 1.6%.
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