US stocks slid on Monday, pulling back from records amid concerns over Federal Reserve independence after US prosecutors opened a criminal investigation into Chair Jerome Powell.

The Dow Jones Industrial Average (^DJI) sank 0.8%, while the S&P 500 (^GSPC) fell 0.3%. Meanwhile, the tech-heavy Nasdaq Composite (^IXIC) dropped around 0.2% on the heels of all-time closing highs for Wall Street stocks.

Rattled markets are turning their backs on US assets after Powell said the Justice Department has subpoenaed the Fed, threatening criminal charges over his testimony on building renovations. In a strongly worded statement, Powell said the action is an escalation of President Trump's campaign to pressure the Fed into cutting interest rates.

"The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President," Powell wrote, describing as "pretexts" the concerns cited in the subpoenas.

The DOJ moves and Powell's sharp response promise to turn an already high-stakes White House-Fed struggle into open war. The developments have reinforced concerns over political interference in monetary policy — worries that helped send gold (GC=F) to fresh record peaks and the dollar (DX-Y.NYB) to its lowest level in three weeks.

In corporates, bank and other financial services stocks slumped thanks to a warning to credit card issuers from Trump. Lenders will be "in violation of the law" if they don't cap interest rates at 10%, he told reporters on Sunday. Shares of Capital One (COF) slid 6% to lead early trading losses. Citi (C) and JPMorgan (JPM) also fell in a downbeat start to a week when big US banks will kick off earnings season.

The unsettled mood comes as investors get ready for this week's updates on inflation in December, with the Consumer Price Index (CPI) reading due on Tuesday. Markets were overwhelmingly betting on no rate cut from the Fed this month after Friday’s December jobs report showed continued cooling in the labor market without signaling a sharp economic slowdown.

Meanwhile, Wall Street kept a watchful eye on Iran, as public unrest edges the country toward revolution and Trump says the US is "looking" at military action as a response to a crackdown on protests. Oil prices retreated as investors weighed the potential impact on crude supply.

AI chipmaker Nvidia (NVDA) and pharmaceutical giant Eli Lilly (LLY) on Monday announced that the two companies will jointly invest $1 billion to create a lab in San Francisco focused on using AI to accelerate drug discovery.

“Combining our volumes of data and scientific knowledge with NVIDIA’s computational power and model-building expertise could reinvent drug discovery as we know it,\\" said Lilly CEO David Ricks.

The investment builds on Nvidia and Lilly's existing partnership. Lilly in October said it is building an AI factory with Nvidia's Blackwell systems to speed up drug discovery timelines.

LLY shares rose fractionally, while NVDA hovered below the flatline.

Shares of Google parent company Alphabet (GOOG, GOOGL) rose as much as 1.5% early Monday after CNBC reported that Apple (AAPL) chose Google's Gemini model to power its AI-related products.

\\"After careful evaluation, we determined that Google’s technology provides the most capable foundation for Apple Foundation Models and we’re excited about the innovative new experiences it will unlock for our users,\\" Apple wrote in a statement obtained by Jim Cramer.

Alphabet stock quickly forfeited these gains after the initial headlines crossed.

The news comes as Google continues to win plaudits for its Gemini model released in late November, which prompted rival OpenAI to declare a \\"code red\\" ahead of the holidays and has seen the latest leg of the AI race take on a new character.

Apple and Google already have an existing relationship, with Google paying Apple billions of dollars per year to be the default search browser inside its Safari browser.

On Monday, Abercrombie & Fitch (ANF) provided an updated holiday quarter outlook that disappointed investors, leading the stock to tank as much as 20% in early trading.

Abercrombie said it expects fourth quarter net sales growth of 5%, the midpoint of its previous range of 4% to 6%.

The mall-based retailer also didn't raise its fiscal year outlook of sales growth of at least 6%, which underwhelmed investors. Abercrombie narrowed its full-year net income per share guidance to $10.30 to $10.40 from a previous range of $10.20 to $10.50.

Concerns about lackluster holiday shopping trends spread to other retail stocks on Monday as well. Urban Outfitters (URBN) stock dropped 11%, while American Eagle Outfitters (AEO) fell 11%.

Read more here from Bloomberg.

Meta (META) said Monday it has appointed President Trump's former deputy national security advisor Dina Powell McCormick as its president and vice chair.

“Dina’s experience at the highest levels of global finance, combined with her deep relationships around the world, makes her uniquely suited to help Meta manage this next phase of growth as the company’s President and Vice Chairman,” Meta CEO Mark Zuckerberg said Monday.

The company said McCormick will \\"ensure our multi-billion-dollar investments execute against our goals.\\" Meta is set to spend $71 billion in 2025, at the midpoint of its capital expenditure guidance range. The social media giant is building a massive AI data center in rural Louisiana as it looks to use artificial intelligence to bolster its core ad business and to rival cloud players Alphabet (GOOGL), Microsoft (MSFT), and Amazon (AMZN).

Meta has hired other Trump-linked personnel as Zuckerberg has worked to align the company with the current administration. In January, Meta brought on a former Trump deputy as its chief legal officer and a top former DOGE lawyer as a lobbyist.

Apple (AAPL) shares fell fractionally Monday, with the stock eyeing a ninth consecutive day of decline — which would mark its longest losing streak since 1991, according to Bloomberg data.

Apple stock's decline came even as closely-watched data from Counterpoint Research on Monday showed the company led the global smartphone market in 2025 with a 20% market share. The iPhone maker accounted for its highest-ever share of global shipments (25%) in the fourth quarter, according to Counterpoint.

Bernstein analyst Mark Newman said the results show Apple is \\"well on track\\" to meet Wall Street consensus estimates for iPhone sales — $78.16 billion, per Bloomberg data — in the first quarter of its fiscal year 2026.

Apple is set to report results for the quarter on Jan. 29.

US stocks slid on Monday at the market open, pulling back from last week's rally to all-time highs as investor concerns mounted over Federal Reserve independence amid the Trump administration's launch of a criminal investigation into Chair Jerome Powell.

The Dow Jones Industrial Average (^DJI) sank 0.8%, while the S&P 500 (^GSPC) fell 0.3%. The tech-heavy Nasdaq Composite (^IXIC) dropped around 0.2%.

Tempus AI (TEM), an $11 billion artificial intelligence company, jumped 12% in premarket trading on Monday after disclosing it reached a record contract value of above $1.1 billion. The preliminary fourth quarter results also suggested a net revenue retention rate of 126% in 2025, the company said.

Tempus AI is a healthcare tech company that provides AI services and data to pharma companies, including players like AstraZeneca (AZN), GlaxoSmithKline (GLAXO.NS), Bristol Myers Squibb (BMY), Pfizer (PFE), Novartis (NVS), and Merck (MRK), among others.

The stock was the top trending ticker early on Monday.

Credit card stocks like Synchrony (SYF) and Capital One (COF) dropped as much as 10% in premarket trading on Monday after President Trump proposed limiting credit card fees to 10% on Friday. It's not clear how Trump plans to cap card fees without Congress's help in passing legislation.

The move, which Trump campaigned on in 2024, drew responses from bank analysts and trade groups on Monday. Yahoo Finance's David Hollerith reports:

\\"Yikes,\\" Wells Fargo analyst Mike Mayo wrote to clients on Monday.

The toll of a one-year 10% cap on fees would hit large bank earnings before tax by an estimated 5%-18%, and \\"wipe out earnings\\" for lenders that exclusively focus on credit cards and related services, such as Capital One and Synchrony Financial, according to Mayo.

Credit card interest rates have jumped significantly in recent years and far exceed the rate paid on other consumer loans. The average rate was 22.30%, according to the most recent Federal Reserve data, up from 16.28% in 2020.

The credit card cap proposal comes as a black eye in what was shaping up to be the financial industry's most favorable regulatory environment in a generation. Five banking industry trade groups, including the American Bankers Association, Bank Policy Institute, and Independent Community Bankers of America, quickly fired off a warning on such a curb within hours of Trump's social media post on the cap.

Read more here.

“Sell America” sentiment rippled through markets on Monday after the Trump administration escalated its attacks on the Fed. The DOJ's threat of criminal charges stoked concerns over the central bank’s autonomy in setting interest rates.

Bloomberg reports:

The dollar (DX-Y.NYB), Treasuries (^TNX) and US equities futures (ES=F) slid after Chair Jerome Powell said the threat of a US criminal indictment was a consequence of a disagreement over monetary policy. While the declines were relatively small, the hot-button issue of the Fed’s independence and the implications for US markets resurfaced in investor debates.

“Any development that raises questions about the Fed’s independence adds uncertainty around US monetary policy,” said Gary Tan, portfolio manager at Allspring Global Investments, which oversees more than $600 billion. “This is likely to reinforce existing trends of diversification away from the dollar and increase interest in traditional hedges such as gold.”

... Some strategists warned that the selloff may deepen if tensions continue to escalate. JPMorgan Asset Management flagged the risk of a steeper Treasury yield curve, meaning long-term rates would rise more than shorter ones, on expectations of more aggressive rate cuts. Lombard Odier sees the dollar and Treasuries coming under more pressure. Invesco Asset Management said non-US assets like European and Asian equities look more favorable.

At the center of the debate is how far the US president can and should influence the nation’s rate stance, which in recent decades have been insulated from political interference. Investors have also questioned whether they should reduce exposure to US assets and the dollar — a theme that dominated global markets last April when President Donald Trump announced universal tariffs.

Read more here.

Economic data: No notable economic data.

Earnings calendar: Wealthfront (WLTH)

Here are some of the biggest stories you may have missed over the weekend and early this morning:

DOJ opens criminal probe into Fed's Powell

Bank earnings to cap banner 2025, set the table for growth

Credit-card stocks sink after Trump warning

Powell raises the stakes in make-or-break fight for the Fed

UnitedHealth used 'aggressive' Medicare tactics: Senate report

Gold storms to records as Fed is hit with subpoenas

Sun Country stock soars on $1.5B buy by Allegiant

Apple leads global smartphone market with 20% share in 2025

Trump 'inclined' to keep ExxonMobil out of Venezuela

Trump: US 'looking' at military strike over Iran crackdown

Yahoo Finance's Jake Conley and Myles Udland lay out the key events in the week ahead:

Looking forward, data on consumer prices out Tuesday, along with producer prices and retail sales on Wednesday, will headline the economic calendar as traders watch for any signal of what the Federal Reserve may do at its meeting at the end of this month.

... Earnings season will also get underway as the country's largest banks lead the pack. JPMorgan Chase (JPM) and BNY Mellon (BK) will report results on Tuesday, while Bank of America (BAC), Wells Fargo (WFC), and Citigroup (C) will report on Wednesday.

Other big names set to report in the week ahead include investment banking power Goldman Sachs (GS) and Morgan Stanley (MS), as well as key chip manufacturer Taiwan Semiconductor (TSM) on Thursday.

... Big banks this week are expected to boast about a record year for the industry, and the second straight year their stocks collectively outperformed the market.

Data from FactSet published Friday showed that investors expect fourth quarter earnings to reveal annual profit growth at S&P 500 firms for the 10th straight quarter, with companies in the index collectively expected to report that earnings rose 8.3% over the prior year to end 2025.

Read more here.

Alibaba's (BABA) US shares rose 4% during premarket trading on Monday after China announced it will be launching a probe into competition practices in the food-delivery sector, increasing hopes that authorities will curb subsidy-driven price wars.

Walmart (WMT) stock rose 3% before the bell on Monday. The retailer will join the Nasdaq 100 Index (^NDX), replacing AstraZeneca Plc (AZN), Nasdaq Global Indexes said Friday.

Affirm Holdings (AFRM) stock climbed 4% before the bell on Monday. The Buy Now Pay Later company received some attention from Citi (C) analysts on Friday, who reiterated their Buy ratings on Affirm, alongside Klarna (KLAR) and Block (XYZ).

American Airlines' (AAL) stock fell 3% during premarket trading. In a report released on Friday, analysts at Barclays (BCS) maintained a Hold rating on American Airlines, with a price target of $16.00.

Sun Country Airlines (SNCY) stock rose 17% before the bell on Monday after Allegiant Travel (ALGT) agreed to purchase the budget airline in a cash and stock deal valuing Sun Country at about $1.5 billion, including $400 million in debt.

MT Newswire reports:

Under the terms of the deal, Allegiant will acquire Sun Country at an implied value of $18.89 per Sun Country share, a premium of 19.8% over Sun Country's closing price on Friday, the companies said.

Allegiant will pay Sun Country shareholders 0.1557 shares of Allegiant stock and $4.10 in cash for each share, the companies said.

The deal is expected to close in H2 2026, the companies said.

Upon closing, Allegiant and Sun Country shareholders will own approximately 67% and 33% of the merged company, respectively, the companies said.

Read more here.

Credit card companies, Capital One (COF) and American Express (AXP) stocks fell 8% and 4%, respectively, during premarket trading on Monday following President Trump's comments that credit-card lenders would be in \\"violation of the law\\" if they don't cap interest rates at 10% for one year.

Trump spoke to reporters on Air Force One as he returned to Washington from Florida and reinforced his demand that credit card companies should lower interest rates and keep them at 10% for one year. Trump has set a January 20 deadline for compliance.

Bloomberg News reports:

If the rates have not been capped by then, Trump said, “then they’re in violation of the law. Some of them are charging 28, almost 30%. People don’t know they’re paying 30%. They’re working and have no idea they’re paying 30%.”

“They really abused the credit cards,” he said of major lenders.

Trump’s demand to cap rates was not backed up by legislation and he provided no explanation for how the lenders would be breaking the law.

Read more here.

Bloomberg reports:

The dollar (DX-Y.NYB) declined the most in almost three weeks as the Federal Reserve faced grand jury subpoenas from the Justice Department, reviving concerns over political interference in monetary policy.

The Bloomberg Dollar Spot Index fell 0.3% on Monday, set for its biggest drop since Dec. 23. That’s after Fed Chair Jerome Powell revealed the central bank had been served grand jury subpoenas, threatening a criminal indictment tied to his June testimony on headquarter renovations.

... Escalating tensions are fueling anxiety over the central bank’s autonomy, potentially upending the bullish options sentiment seen at the start of the year. The dollar opened 2026 with a strong bias, particularly against the euro, a distinct shift from December’s dynamics. That leaves short-term positioning vulnerable to a further unwind amid the latest developments.

The dollar’s position as the world’s reserve currency depends on institutional trust, Nigel Green, chief executive officer of financial-advisory firm deVere Group, wrote in a note. “History teaches that countries that allow political leaders to dominate central banks pay a heavy economic price.”

Read more here.

Reuters sourced the following comments from analysts and investors about the Trump administration's move against Federal Reserve chair Jerome Powell:

VISHNU VARATHAN, HEAD OF ⁠MACRO RESEARCH, ASIA EX-JAPAN, ‌MIZUHO, SINGAPORE

\\"The Fed independence question is now well and alive and maybe subject to re-evaluation every few meetings.

\\"I think ‍I'm still not sure how sustained and adversarial the attack on the Fed might be. There could be a scenario where Trump could still appoint someone with ​some credibility and allow this person to run the show - so ‌that's probably why markets aren't panicking as yet.\\"

ANDREW LILLEY, CHIEF RATES STRATEGIST AT BARRENJOEY, SYDNEY

\\"Trump is pulling at the loose threads of central bank independence. I don't even believe that he expects that Chair Powell will be charged... The only reason that he's taking these steps is that ⁠he knows that he's not going to ​take control of the Fed, so he ​wants to exert as much undue pressure as he can.

\\"It is not good. Don't get me wrong, but I think ‍it will amount to ⁠nothing. Investors won't be happy about it, but it shows actually Trump has no other levers to pull. The cash rate ⁠will stay what the majority of the FOMC wants them to be.\\"

Bloomberg reports:

Gold (GC=F) jumped to a record high as the US Justice Department threatened the Federal Reserve with a criminal indictment, reviving concerns over its independence, while intensifying protests in Iran also kept geopolitical tensions elevated.

Bullion rose to almost $4,600 an ounce on Monday and silver (SI=F) was just shy of an all-time peak after Fed Chair Jerome Powell said the potential indictment “should be seen in the broader context of the administration’s threats and ongoing pressure” to influence the central bank’s interest-rate decisions. Repeated attacks on the Fed last year by the Trump administration were a major factor undermining confidence in the dollar.

Deadly protests in Iran also increased the haven appeal of precious metals on the possibility the Islamic Republic could be overthrown, injecting uncertainty into geopolitics and oil markets. US President Donald Trump said Sunday he was mulling potential options on Iran, while also reiterating threats to take Greenland and questioning the value of the NATO alliance, just over a week after seizing Venezuelan leader Nicolas Maduro.

Read more here.

Bloomberg reports:

In a statement released Sunday evening, Powell rejected the notion that the action was driven by his testimony or the renovation.

“Those are pretexts,” Powell said. “The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president.”

Powell added, “This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions — or whether instead monetary policy will be directed by political pressure or intimidation.”

The US dollar dxy weakened on the news, falling against all its major counterparts, while gold extended gains to a record high. Futures on the S&P 500 Index fell 0.3%.

Read more here.

Associated Press reports:

President Donald Trump said Sunday that he is “inclined” to keep ExxonMobil (XOM) out of Venezuela after its top executive was skeptical about oil investment efforts in the country after the toppling of former President Nicolás Maduro.

“I didn’t like Exxon’s response,” Trump said to reporters on Air Force One as he departed West Palm Beach, Florida. “They’re playing too cute.”

During a meeting Friday with oil executives, Trump tried to assuage the concerns of the companies and said they would be dealing directly with the U.S., rather than the Venezuelan government.

Read more here.