U.S. Futures Fall, Safe-Havens Surge as Fed Chair Powell Under Investigation

• S&P 500 futures dropped 0.7%, Dow futures fell 0.6%, and Nasdaq futures declined 1.1% in premarket trading, while gold and silver surged as safe-haven demand increased
• The dollar fell 0.3% to 98.832 on the DXY index, with the two-year Treasury yield dropping 1.2 basis points to 3.527% while the 10-year yield rose 1.2 basis points to 4.182%
• Markets now await Tuesday's December U.S. inflation data and Wednesday's bank earnings reports, with heightened focus on longer-term inflation risks if the Fed's independence is compromised

Market Summary: Fed Chair Powell Investigation Triggers Risk-Off Trading

Key Development:

U.S. prosecutors launched a criminal investigation into Federal Reserve Chair Jerome Powell regarding his testimony on the central bank's building renovations, triggering a sharp risk-off move across global markets.

Market Reaction:

• U.S. futures fell sharply: S&P 500 down 0.7%, Dow Jones down 0.6%, and Nasdaq down 1.1% in premarket trading (despite Friday record closes for S&P and Dow)
• Safe-haven assets surged: gold and silver rose sharply
• The DXY dollar index dropped 0.3% to 98.832
• U.S. Treasury yield curve steepened: 2-year yields fell 1.2 basis points to 3.527%, while 10-year yields rose 1.2 basis points to 4.182%

Regional Performance:

• European markets retreated from Friday's record closes, with banks and automakers leading declines. Spanish IBEX 35 fell 0.96%, France's CAC 40 down 0.4%, UK's FTSE 100 down 0.2%
• Asian markets gained, with Hong Kong's Hang Seng up 1.4% and Shanghai Composite up 1.1% (Japan closed for holiday)

Analyst Perspective:

Commerzbank's Thu Lan Nguyen noted the investigation raises concerns about Federal Reserve independence and President Trump's efforts to pressure the Fed on interest rates, potentially increasing longer-term inflation risks.

Upcoming Catalysts:

• December U.S. inflation data (Tuesday)
• Major U.S. bank earnings (Wednesday)
• U.S. Supreme Court ruling on Trump's tariff regime (Wednesday)

The situation also coincides with intensifying protests in Iran, adding to geopolitical uncertainty.