The New York stock market is preparing to open under tension. Reports of a criminal investigation into the Federal Reserve Chair are driving this sentiment. Concerns regarding the erosion of central bank independence have resurfaced. Consequently, risk aversion is spreading. We observe capital moving toward safe-haven assets.
On the 12th, the market focused on a specific variable. The Department of Justice has launched a criminal investigation into Jerome Powell. This action relates to his congressional testimony regarding the renovation of the Fed headquarters. This development is currently the most significant factor affecting market conditions.
The New York market prepares to open under tension. Reports of a criminal investigation into the Federal Reserve Chair are circulating. There is renewed concern about the independence of the Fed. Risk aversion is spreading. Capital is moving toward safe assets.
On the 12th, the market focuses on a key variable. The Department of Justice is investigating Jerome Powell. The inquiry relates to his congressional testimony on headquarters renovation. The political independence of interest rate policy is being tested. This perception affects stocks, foreign exchange, and bond markets.
Powell argues the investigation stems from the Fed setting rates for the public good. He states this was not based on presidential preference. President Trump claims the investigation is separate from rate pressure. However, the market worries about political interference in the Fed's process.
Investors see risks beyond Powell personally. This issue could burden the selection of future chairs. It may also affect trust in US monetary policy.
Bank earnings season begins this week. This increases investor caution. President Trump mentioned capping credit card rates at 10% for a year. This highlights policy risk for financial stocks. Uncertainty regarding the Fed and regulation issues overlap. We expect high volatility at the market open.
At 8:05 AM Eastern Time on the 12th, major index futures are falling. S&P 500 futures dropped 34.75 points (-0.50%) to 6970.25. Dow Jones futures fell 327 points (-0.66%) to 49,399. Nasdaq futures dropped 178.25 points (-0.69%) to 25,760. We anticipate weakness in technology stocks.
Russell 2000 futures also fell 3.20 points (-0.12%) to 2633.70. The VIX volatility index rose over 10% to 15.96. This indicates rapidly expanding investor caution. The mood shifted quickly. Major indices hit record highs last week due to strong employment data.
Anxiety is reflected in foreign exchange and bond markets. The Dollar Index fell 0.34% to 98.80. Conversely, the 10-year US Treasury yield rose slightly to 4.171%. Usually, rising rates lead to a stronger dollar. Here, we see a weaker dollar alongside rising rates. This suggests shaken trust in US assets.
Preference for safe assets is notable in precious metals. Gold rose 2.18% to $4,599, setting a new record. Silver surged 5.93% to $84.045. Analysis suggests capital moved to safe assets due to Fed risk and geopolitical uncertainty. WTI crude oil fell 0.17% to $59.02 per barrel. Movement here was relatively limited.
The digital asset market showed a weak trend. Bitcoin (BTC) fell 0.20% on the day to $90,636.43. Ethereum (ETH) rose 0.15% to $3,113.82. It showed a relatively steady flow.
Among altcoins, XRP fell 2.52%. BNB dropped 1.31%. SOL rose 2.09%. TRX fell 0.32%. DOGE dropped 3.17%. ADA also fell 2.45%, joining the weak trend.
Not financial advice. DYOR.
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