U.S. Stocks Fall, Gold and Silver Soar to New Highs After Trump Threatens Federal Reserve's Independence

Barry Adams
12 Jan, 2026
New York City

Stocks, bonds, and the U.S. dollar came under pressure after the U.S. president ramped up his campaign to attack the Federal Reserve.

The S&P 500 index decreased 0.7%, the tech-heavy Nasdaq declined 0.9%, and the U.S. dollar eased against all major currencies. 

Last week, global markets extended early gains after a choppy week of trading as investors overlooked rising geopolitical tensions. U.S. Treasury yields and crude oil held steady, and gold advanced as investors debated future rate paths.

However, the market's mood was decisively negative after the U.S. Justice Department opened an investigation into Federal Reserve Chair Jerome Powell's testimony to the U.S. lawmakers regarding the renovation project. 

The Department of Justice's criminal investigation is related to Powell's testimony to the Senate Banking Committee on the renovation of office buildings.  

Powell shot back in a statement saying that this is not about renovation but yet another attempt by Mr. Trump to intimidate the central bank and bend the monetary policy to his liking. 

"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," said Fed Chair Powell in a statement. 

"This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions—or whether instead monetary policy will be directed by political pressure or intimidation," added Fed Chair Powell.  

Powell's term as Federal Reserve Chairman is set to end in May, and the central bank is likely to lower rates at least two times in 2026 but stay put at the end of the next meeting later this month.  

 

U.S. Stock Movers 

Banks came under pressure after the U.S. president demanded to lower interest rates on credit card loans to 10%. 

JP Morgan Chase, Citigroup, Wells Fargo, and Bank of America decreased between 3% and 5%. 

Gold jumped 2% to $4,589.95, and silver advanced 5% to $84.14 following Trump's renewed attack on the Fed's independence. 

On the earnings front, JPMorgan, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, PNC Financial Services, BlackRock, Delta Airlines, and KB Home are set to report quarterly results this week.