Wall Street Hits Records Despite Powell Worries

Wall Street edged to more records Monday after bouncing back from early losses taken because of worries about the worsening feud between the White House and the Federal Reserve.

• The S&P 500 rose 10.99 points, or 0.2%, to 6,977.27 and added to its all-time high set on Friday.
• The Dow Jones Industrial Average recovered an early loss of 1% and rose 86.13 points, or 0.2%, to 49,590.20.
• The Nasdaq composite rose 62.56 points, or 0.3%, to 23,733.90.

Some nervousness was still evident in the market, though, amid concern that the Fed may be on the path to less independence in setting interest rates to keep inflation under control, the AP reports. Prices for gold and other investments that tend to do well when investors are nervous rose, while the value of the US dollar dipped against other currencies.

Walmart helped lead the US stock market higher despite such worries. It climbed 3% after learning that its stock will join the widely followed Nasdaq 100 index. Google also said Sunday that it's expanding the shopping features in its AI chatbot by teaming up with Walmart and several other big retailers. Chip companies, meanwhile, were the strongest forces pushing upward on the S&P 500, including a 2.1% gain for Broadcom. They helped offset losses for the majority of stocks within the S&P 500.

Leading them all were credit card companies after President Trump threatened moves that could eat into their profit. Synchrony Financial fell 8.4%, Capital One Financial sank 6.4%, and American Express dropped 4.3%. They weakened after Trump said he wanted to put a 10% cap on credit card interest rates for a year.

• But it was a separate move by Trump that grabbed the most attention across financial markets. Over the weekend, the Federal Reserve's chair said the US Department of Justice subpoenaed the Fed and threatened a criminal indictment over his testimony about renovations at its headquarters.
• Through an unusual video statement released on Sunday, Fed Chair Jerome Powell said his testimony and the renovations are "pretexts" for the threat of criminal charges, which is really "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."
• Financial markets could be shaking off concerns about the Fed's independence for a couple reasons. Traders could see "a limitation to the White House's success in getting its way," according to Thierry Wizman, a strategist at Macquarie Group, because Congress could deny confirmation of any nominees for the Fed from the White House.
• Plus, this latest move could encourage Powell to stay on at the Fed as a governor until his term expires in 2028, even though his term as chair will end in May, said Brian Jacobsen, chief economist at Annex Wealth Management. "With the political pressure on the Fed, he may choose to stay on as a governor out of spite," he said. "It would deprive President Trump of the ability to stack the board with another appointee."

On Wall Street, Abercrombie & Fitch dropped 17.7% after the retailer gave a forecasted range for profit in the final quarter of 2025 whose midpoint fell short of analysts' expectations. Its forecast for growth in revenue also fell shy of Wall Street's. Other retailers that sell clothes in malls also struggled, including drops of 12.3% for Urban Outfitters and 3.5% for American Eagle Outfitters.