Stock market today: Dow, S&P 500, Nasdaq futures slide on threat to Fed as DOJ begins criminal probe of Powell

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US stock futures sank on Monday, pulling back from records amid concerns over Federal Reserve independence after US prosecutors opened a criminal investigation into its Chair Jerome Powell.

Dow Jones Industrial Average futures (YM=F) sank 0.7%, while S&P 500 futures (ES=F) fell 0.6%. Contracts on the tech-heavy Nasdaq 100 (NQ=F) led the way lower, dropping roughly 0.9% on the heels of all-time closing highs for Wall Street stocks.

Rattled markets are turning their backs on US assets after Powell said the Justice Department has subpoenaed the Fed, threatening criminal charges over his testimony on building renovations. In a strongly worded statement, Powell said the action is a escalation of President Trump’s campaign to pressure the Fed into cutting interest rates.

“The threat of criminal charges is 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,” Powell wrote, describing as “pretexts” the concerns cited in the subpoenas.

Powell’s combative response and the DOJ moves promise to turn an already high-stakes White House-Fed struggle into open war. That has reinforced concerns over political interference in monetary policy, worries that helped send gold (GC=F) to fresh record peaks and to push the dollar (DX-Y.NYB) to its lowest level in three weeks.

The turbulence comes as investors get ready for this week’s updates on inflation in December, with the consumer inflation reading due on Tuesday. Markets were overwhelmingly pricing in no rate cut from the Fed this month after Friday’s December jobs report showed continued cooling in the labor market without signaling a sharp economic slowdown.

Meanwhile, Wall Street kept a watchful eye on Iran, as public unrest edges the country toward revolution and Trump says the US is “looking” at military action as a response to a crackdown on protests. Oil prices retreated as investors weighed the potential impact on crude supply.

Geopolitical developments elsewhere remain a wildcard. The US has escalated pressure on Cuba over Venezuelan oil shipments, while Greenland is still in focus after Trump last week said the US could pursue control of the Danish territory “whether they like it or not.”

In corporates, bank and other financial services stocks slumped thanks to a warning to credit card issuers from Trump. Lenders will be “in violation of the law” if they don’t cap interest rates at 10%, he told reporters on Sunday. Shares of Capital One (COF) slid 10% to lead premarket losses, while Citi (C) and JPMorgan (JPM) also fell in a downbeat start to a week where big US banks will kick off earnings season.

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