US Stocks Close Higher Amid Criminal Probe Into Fed Chair Powell

NEW YORK, Jan 13 (Bernama-Xinhua) -- United States (US) stocks finished slightly higher on Monday, staging a late-session recovery as investors navigated a volatile landscape marked by a criminal probe into the Federal Reserve leadership, reported Xinhua.

The Dow Jones Industrial Average rose 0.17 per cent to 49,590.2. The S&P 500 added 0.16 per cent to 6,977.27. The Nasdaq Composite Index edged up 0.26 per cent to 23,733.9.

Despite the positive close, the market experienced significant intraday turbulence, with the Dow dropping nearly 500 points at its session lows.

Nine of the 11 primary S&P 500 sectors ended in positive territory.

Consumer staples and industrials led the gainers, rising 1.42 per cent and 0.75 per cent, respectively. Financials and energy were the primary laggards, declining 0.8 per cent and 0.66 per cent.

Market sentiment was initially shaken by an announcement on Sunday from Fed Chair Jerome Powell, who confirmed that federal prosecutors are investigating him over the Fed's multi-billion-dollar project to renovate its headquarters.

Powell characterised the probe as an attempt by the Trump administration to compromise the Fed's independence.

"The impact of Chairman Powell being under investigation is likely a long-term impact, meaning it's not going to change interest rates in the near term; it's not going to change inflation in the near term," Jim Lebenthal, chief markets strategist at Cerity Partners, told CNBC.

Further weighing on the financial sector was a proposal by US President Donald Trump to cap credit card interest rates at 10 per cent for one year, which triggered a sell-off in banking stocks amid concerns over restricted lending and reduced profitability.

Capital One shares plummeted 6.42 per cent, while Citigroup, JPMorgan and Bank of America also recorded losses.

In contrast, retail giant Walmart led the Dow's advance, climbing three per cent following news of its upcoming inclusion in the Nasdaq 100 index.

The company also announced a strategic partnership with Google's Gemini AI to enhance the digital shopping experience.

Investors are awaiting Tuesday's release of the US consumer price index for December 2025.

Following last week's cooling labour market data, market participants increasingly expect the Fed to maintain interest rates at their current levels during the upcoming January meeting.  

--BERNAMA-XINHUA