Dow Futures Slip as Powell Probe and Credit Card Cap Rattle Markets Ahead of Big Earnings Week

U.S. stock futures opened the week on the defensive, with Dow Jones, S&P 500, and Nasdaq futures all sliding early Monday, as political and policy uncertainty collided with a packed calendar of earnings and economic events.

The pullback follows news that federal prosecutors have launched a criminal investigation into Federal Reserve Chair Jerome Powell, a move Powell says is tied directly to his refusal to cut interest rates as aggressively as President Donald Trump wants. The development injected fresh volatility into markets that just finished a powerful rally to record highs.

Ahead of the opening bell, Dow Jones futures fell 0.7%, while S&P 500 futures dropped 0.5% and Nasdaq 100 futures slid 0.7%. The 10-year Treasury yield climbed to 4.2%, near four-month highs, while gold surged to a new record and silver jumped, signaling a shift toward defensive positioning.

Crude oil edged lower in early trading, following last week’s gains.

Despite the overnight weakness, investors are mindful that futures moves don’t always dictate the direction of the regular trading session—especially during volatile, news-heavy weeks.

The catalyst for the early sell-off was confirmation that the Justice Department is investigating Powell over the Federal Reserve’s headquarters renovation and whether he misled Congress during testimony in mid-2024. Powell strongly rejected the premise of the probe, calling it a “pretext” aimed at pressuring the Fed to cut rates faster.

“This 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,” Powell said, “rather than following the preferences of the President.”

Trump denied direct knowledge of the investigation but reiterated that interest rates are “far too high.” Powell’s term as Fed chair ends in May, though he could remain on the Fed’s board if he chooses.

Adding to the market’s unease, Trump renewed calls for a one-year cap on credit card interest rates at 10%, sending shockwaves through financial stocks.

Capital One plunged nearly 9%, American Express fell 4%, and Visa and Mastercard slid about 2%. Major banks, including JPMorgan, Citigroup, and Wells Fargo, declined between 2% and 4% in premarket trading, leading the Dow futures lower.

The pullback comes after a broad and powerful rally last week, led by small-cap stocks. The Dow Jones Industrial Average surged 2.3%, the S&P 500 rose 1.6%, and the Nasdaq gained 1.9%, while the Russell 2000 soared 4.6% to a record high.

Equal-weight ETFs also broke out, highlighting expanding market breadth. Housing-related stocks jumped late in the week after Trump ordered Fannie Mae and Freddie Mac to purchase $200 billion in mortgage bonds to help lower borrowing costs.

Investors now turn their attention to a critical week of earnings and corporate updates. JPMorgan Chase, Goldman Sachs, Morgan Stanley, Citigroup, and Wells Fargo will offer insight into the health of the banking sector, while Delta Air Lines kicks off earnings for carriers.

The tech spotlight will fall on Taiwan Semiconductor, whose results and guidance are crucial for chipmakers tied to Nvidia, AMD, Broadcom, and Apple.

Beyond earnings, the JPMorgan Healthcare Conference, NRF retail conference, and ICR consumer conference could drive significant stock-specific moves across biotech, healthcare, and retail names.

Alphabet (Google) and GE Aerospace remain in buy zones, with Google hitting a record close after announcing new AI shopping partnerships with Walmart, Shopify, and Wayfair. Taiwan Semiconductor also continues to attract attention as a key leader in the semiconductor space.

Despite Monday’s early dip, the market’s overall trend remains constructive, with leadership broadening across sectors. Investors are advised to stay actively invested—but diversified—as earnings, inflation data, and potential Supreme Court rulings on tariffs loom.

With so many catalysts on deck, volatility is likely. The coming days will test whether the rally’s momentum can withstand political noise and policy uncertainty—or whether markets are due for a deeper pause.