Dow Jones & Nasdaq 100: Powell Investigation Jolts US Futures Overnight

• Nasdaq 100 E-mini fell 202 points, S&P 500 E-mini dropped 34 points, and Dow Jones E-mini declined 204 points in early Monday trading following Powell's announcement
• USD/JPY climbed to 158.206, its highest level since January 2025, as falling 10-year JGB yields from a 1999 high boosted yen carry trades and cushioned downside risks for US equities
• Markets await December CPI data (forecast to hold at 2.7% annually) and the start of earnings season with JPMorgan Chase reporting January 13, with both expected to influence Fed rate path expectations

Market Summary: DOJ Investigation Rattles US Futures

Key Developments

US stock futures tumbled in Asian trading on January 12, 2026, following Fed Chair Jerome Powell's announcement of a DOJ criminal investigation into the Federal Reserve. The Nasdaq 100 E-mini fell 202 points, S&P 500 E-mini dropped 34 points, and Dow Jones E-mini declined 204 points.

Powell's Response

Powell characterized the investigation as "unprecedented" intimidation, emphasizing it threatens the Fed's ability to set interest rates based on economic evidence rather than political pressure. He stated the probe stems from the administration's ongoing efforts to influence monetary policy.

Japanese Market Dynamics

USD/JPY climbed to 158.206, its highest level since January 2025, driven by political uncertainty as Prime Minister Sanae Takaichi considers a snap election. Japanese 10-year JGB yields retreated from their 1999 high of 2.138% recorded January 6, bolstering yen carry trades that partially cushioned US equity futures losses.

Critical Data Ahead

Markets await Tuesday's December CPI report, with economists forecasting annual inflation holding steady at 2.7%. JPMorgan Chase (JPM) kicks off earnings season January 13, with corporate results expected to influence near-term sentiment.

Technical Outlook

Despite losses, all three major indices remain above their 50-day and 200-day EMAs, signaling medium-term bullish trends. Key resistance levels: Dow 50,000, Nasdaq 100 at 26,000, S&P 500 at 7,018.

Market Implications

Analysts maintain a cautiously bullish outlook supported by earnings optimism, eventual Fed rate cuts, and robust US economic growth. However, risks include escalating political interference with Fed independence, potential yen carry trade unwinding, and disappointing corporate earnings.