- US equities closed the session higher despite political turmoil caused by reports of a legal action against the Fed Chair.
- Financial stocks slipped while consumer and tech stocks remained supported.
- Markets await US CPI data due on the day for further impetus.
US equities ended a chaotic day higher, despite renewed uncertainty from the Federal Reserve over politics and policy. Major indices closed at record levels after early losses related to Federal Reserve Chair Jerome Powell’s investigation were reversed.
The Dow Jones Industrial Average increased 0.17% to 49,590, up 86 points. Nasdaq Composite up 0.26% to 23,733, while S&P 500 rose 0.16% to 6,977. The Dow and S&P 500 hit record intraday highs. The Russell 2000 set a record, demonstrating broad resilience. However, market uneasiness persisted as the VIX rose almost 4% to 15.12.
Markets opened under pressure after Powell acknowledged that the Justice Department had sent the Fed a grand jury subpoena for testimony on a central bank headquarters construction project. Powell called the unusual escalation an attempt to influence monetary policy. Several former Fed officials openly defended central bank independence, while speculation that Trump may interview Powell’s successor increased concern.
Despite political headlines, investors seemed willing to ignore them. Several experts said the investigation won’t change interest rate policy soon. Economic data, particularly this week’s US consumer price index, may influence the Fed’s future measures.
Sector performance varied. Financial stocks declined as Trump proposed a one-year cap on credit card interest rates at 10%. Shares of major banks fell on concerns that such a move would limit lending and hurt their profitability. However, consumer and technology stocks were supported. Walmart rose 3% before joining the Nasdaq-100, while tech stocks rose on deal activity and upgrades.
Overall, the session showed market sentiment. Political uncertainties and policy questions are causing volatility, but robust earnings expectations, economic growth, and optimism about inflation support equities. Investors seem more concerned with data and fundamentals than Washington’s new turmoil.
