The S&P 500 fell 0.1% from its all-time high as U.S. stocks led through mixed morning trade, while prices for gold and other investments that are nervous investors did well. The US dollar also fell against the euro and other currencies, suggesting the Fed may have less freedom to set interest rates to keep inflation under control.
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On 10 January 2026, 02:30 AM IST
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The Dow Jones Industrial Average was down 179 points, or 0.4%, as of 10 a.m. Eastern Time and the Nasdaq Composite was almost unchanged.
Some of the market’s sharpest declines came from credit-card companies, as Synchrony Financial, Capital One Financial and American Express all fell between 4% and 7%. They caved in after Trump said he wanted to put a 10% cap on credit card interest rates for a year. Such a move could eat into profits for credit card companies.
But it was a different move by Trump that drew more attention on Wall Street. Over the weekend, the chairman of the Federal Reserve, Jerome Powell, said the US Department of Justice had subpoenaed the Fed and threatened criminal charges over his testimony about ongoing renovations at its headquarters.
In an unusual video statement released Sunday, Powell said his testimony and renewal are “pretexts” for threatening criminal charges, which are really “the result of the Federal Reserve setting interest rates based on its best assessment of what will serve the public, rather than following the president’s preferences.”
The Fed is locked in a spat with the White House over interest rates. Trump has been loudly calling for lower interest rates, which would make borrowing cheaper for US households and companies and could kickstart the economy.
The Fed cut its key interest rate three times last year and has signaled more cuts could come this year. But it’s moving so slowly that Trump has nicknamed Powell “too late.”
In a brief interview with NBC News on Sunday, President Donald Trump insisted he was not aware of the Powell investigation. Asked if the investigation was intended to pressure Powell on rates, Trump said, “No. I wouldn’t even consider doing it that way.”
Powell’s term as chairman ends in May, and Trump administration officials have indicated they could name a potential replacement this month. Trump has also called for Fed Governor Lisa Cook to be fired.
The Fed has traditionally operated differently from the rest of Washington, making its decisions on interest rates without bowing to political whims. Such freedom, the thinking goes, gives it the freedom to make unpopular moves that are essential to the economy’s long-term health.
Keeping interest rates high, for example, can slow the economy and frustrate politicians trying to please voters. But it may also be the medicine needed to keep high inflation under control.
In bond markets, the yield on the 10-year Treasury rose to 4.19% from 4.18% late Friday. A less independent Fed and higher inflation in the long run could also weigh on the US dollar, and it fell 0.3% against the euro and 0.4% against the Swiss franc.
Among overseas stock markets, indices in most of Europe and Asia rose. Stocks jumped 1.4% in Hong Kong and 1.1% in Shanghai for two of the world’s biggest gains, following reports that Chinese leaders are preparing more aid for the economy.
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