Wall Street and US government bonds steadied on Monday after early volatility tied to fears over political pressure on the FED, while the dollar weakened and gold surged to record levels.
Major US indexes closed at fresh highs. The S&P 500 and Dow Jones Industrial Average both added about 0.2%, while the Nasdaq Composite rose 0.3%, helped by gains in Walmart, which recently moved its listing to the Nasdaq.
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Market nerves followed an unusually blunt response from Fed Chair Jerome Powell, who accused the Justice Department of using the legal system to pressure the central bank. Investors largely treated the development as political noise, though questions over Fed independence lingered.
US Treasuries were little changed. The yield on the 10 year note rose slightly to around 4.19% after briefly touching higher levels during the session. Traders said markets appeared to be digesting the headlines rather than repricing risk aggressively.
The US dollar weakened, with the dollar index falling about 0.3%, erasing its early year gains. The euro strengthened as investors reassessed confidence in US policy stability.
Gold jumped to a fresh record above $4,600 an ounce, reflecting demand for safe havens, before paring gains. Oil prices also climbed to seven week highs, supported by concerns over supply disruptions linked to Iran, even as the market weighed the possibility of additional barrels from Venezuela.
Financial stocks underperformed after President Donald Trump renewed calls for a one year cap on credit card interest rates at 10%, pressuring lenders and card issuers.
Investors now turn their focus to upcoming US inflation data, China trade figures, and the start of the US earnings season, which will test whether markets can sustain gains amid growing political and policy uncertainty.
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