On Monday, investors temporarily set aside concerns regarding the impact of a U.S. Department of Justice criminal investigation into Federal Reserve Chair Jerome Powell. The three major indices closed higher, with the Dow Jones Industrial Average hitting an intraday record high of 49,633.35 and the S&P 500 reaching a peak of 6,986.33 during the session. Alphabet (GOOG.US, GOOGL.US), the parent company of Google, saw its market capitalization surpass the $4 trillion milestone.
At the close, the Dow Jones Industrial Average rose by 86.13 points, or 0.17%, to 49,590.20; the Nasdaq Composite gained 62.56 points, or 0.26%, settling at 23,733.90; and the S&P 500 added 10.99 points, or 0.16%, finishing at 6,977.27. Citigroup (C.US) fell 3%, while Oracle (ORCL.US) climbed 3%. The Nasdaq Golden Dragon China Index closed up 4.2%, with Bilibili (BILI.US) surging 9%, Alibaba (BABA.US) jumping 10%, and XPeng (XPEV.US) advancing 8%.
Germany's DAX 30 index increased by 168.97 points, or 0.67%, to 25,426.64; the UK's FTSE 100 added 13.71 points, or 0.14%, reaching 10,138.31; France's CAC 40 edged down 3.33 points, or 0.04%, to 8,358.76; the Euro Stoxx 50 rose 19.18 points, or 0.32%, to 6,016.65; Spain's IBEX 35 gained 11.11 points, or 0.06%, to 17,660.11; and Italy's FTSE MIB was virtually flat, up just 0.24 points to 45,719.50.
Bitcoin continued to oscillate within the $90,000 to $92,000 range; Ethereum declined 0.67% to $3,102.83.
The U.S. Dollar Index, which measures the greenback against a basket of six major currencies, fell 0.27% on the day to settle at 98.862. By the close of New York forex trading, one euro traded at $1.1672, up from $1.1635 the previous session; one pound sterling bought $1.3466, higher than $1.3407. One U.S. dollar was worth 158.14 Japanese yen, up from 157.88 yen; it exchanged for 0.7970 Swiss francs, down from 0.8010; it was valued at 1.3871 Canadian dollars, lower than 1.3910; and it traded for 9.1693 Swedish krona, down from 9.2025.
The U.S. Department of Justice's investigation into Fed Chair Powell sparked significant market concerns over central bank independence, fueling a sharp rise in 'sell America' sentiment. Safe-haven capital flooded into precious metals, driving both spot gold and spot silver to fresh record highs. Institutions widely warned that this event heightens uncertainty around U.S. monetary policy and could prompt sustained capital outflows from dollar-denominated assets.
The price of light crude oil for February delivery on the New York Mercantile Exchange rose 38 cents, or 0.64%, to settle at $59.50 per barrel. Brent crude for March delivery increased by 53 cents, or 0.84%, closing at $63.87 per barrel.
Former President Donald Trump stated that countries doing business with Iran will face a 25% tariff. Trump announced on social media that the new tariff would take effect immediately but provided no further details. The administration has not released documentation outlining the scope of the tariffs, and Trump did not specify how "doing business with Iran" would be defined. Some analysts believe this move may temporarily reduce the likelihood of U.S. military intervention against Iran.
U.S. small-cap stocks extended their longest winning streak against large-caps in seven years. The Russell 2000 index closed at a record high on Monday, marking its seventh consecutive day of outperformance against the S&P 500. The last longer streak dates back to January 2019, when markets were rebounding from a sharp sell-off. In December 2018, the S&P 500 fell 9.2% and the Russell 2000 dropped 12% amid rising interest rates, trade war fears, and concerns about an economic slowdown. The following month, the Russell 2000 rebounded 11%, while the S&P 500 gained 7.9%.
Treasury Secretary Beshear reportedly warned that the Fed investigation is causing market turmoil and might lead Powell to resist relinquishing power. Two informed sources indicated that Beshear told Trump the federal probe into the Fed Chair had become a "mess" and could adversely affect financial markets. One source familiar with the call said the Secretary was "unhappy" and had made this clear to the President. Trump appears to be deliberately distancing himself from the investigation. Sources noted that the probe was initiated by the Washington office of U.S. Attorney Jeanine Pirro without prior notification to the Treasury, senior White House officials, or the main Justice Department. Another source suggested Beshear believed Powell would depart when a new Fed Chair was appointed, but now "Powell is digging in his heels. This really messes things up." However, sources clarified that Beshear did not question the necessity of the investigation nor defend Powell during the conversation.
In a new social media post, Trump claimed that if the U.S. government loses a court case on tariffs, the nation could face a multi-trillion-dollar debt quagmire. He asserted that potential repayments could reach hundreds of billions of dollars, excluding "return" demands from investments made to circumvent tariffs, potentially totaling trillions. He described this scenario as a "complete mess" the country could hardly afford, stating, "If the Supreme Court rules against the United States on this National Security Dividend issue, we're finished!"
Fitch Ratings expects the Japanese yen to stage a moderate recovery from historic lows. In its latest foreign exchange market monitor, Fitch projected the yen would appreciate modestly by 2026 but remain at historically weak levels. After a volatile year, the yen's nominal and real trade-weighted exchange rates were near record lows by the end of 2025. The yen appreciated alongside other currencies in the first four months of last year as the U.S. dollar weakened. However, with the Bank of Japan holding rates steady for most of the year despite persistent inflation, the yen's nominal trade-weighted rate depreciated steadily by approximately 13% from mid-April to year-end. Fitch views the 160 yen-to-dollar level as a key focal point for Japanese authorities. As monetary policy normalizes while other major central banks either cut rates or hold steady, the yen has room for some appreciation. Fitch forecasts the yen will strengthen about 6% against the dollar this year.
Apple (AAPL.US) has selected Google's Gemini to power the AI capabilities of Siri, set to launch later this year. A reported statement indicated that the multi-year partnership will leverage Google's Gemini model and cloud technology to underpin Apple's future foundational models. Apple stated, "After careful evaluation, we believe Google's technology provides the strongest foundation for Apple's foundational model, and we are excited about the innovative experiences it will bring to users."
Racing to catch the AI wave, Meta (META.US) is investing tens of billions to build a world-leading computing infrastructure. CEO Mark Zuckerberg announced via Threads the launch of a top-tier strategic initiative named "Meta Compute." The plan aims to construct computing infrastructure with a capacity of tens of gigawatts (GW) within this decade, with ambitions to expand to hundreds of GW in the future. According to Zuckerberg, the effort will be co-led by Santosh Janardhan, Global Head of Infrastructure and Engineering Co-head, and Daniel Gross, who will lead a new team focused on long-term capacity strategy and supplier partnerships. Following the lukewarm market reception of its Llama 4 model, Meta has been striving to maintain its position in the Silicon Valley AI race and has committed to capital expenditures of up to $72 billion for 2025.
Barclays lowered its price target for Microsoft (MSFT.US) to $610.00 from $625.00 per share, maintaining an Overweight rating. Citigroup upgraded Palantir (PLTR.US) from Neutral to Buy and raised its price target to $235 from $210.
Comments