Stocks fell in early trading Monday, hours after reports that the Justice Department had opened a criminal investigation into Federal Reserve Chair Jerome Powell focused on the central bank leader’s comments to Congress about an office renovation project.
Powell, who was appointed by Trump in 2017, issued a rare video message chastising the investigation as a politically motivated effort to influence the Federal Reserve’s interest rate policy.
The Dow Jones Industrial Average fell 290 points, or 0.6%, while the S&P 500 fell 0.4%. The tech-heavy Nasdaq fell 0.3%.
Monday’s selloff also appeared to include a reaction to a social media post by President Donald Trump advocating for a 10% cap on credit card interest rates for one year. Shares of several major banks fell in early trading.
The Justice Department’s criminal investigation follows a months-long influence campaign waged by Trump, who has frequently criticized the Federal Reserve for what he sees as a reluctance to significantly reduce interest rates.
Traders work at the New York Stock Exchange in New York, January 9, 2026.
Seth Wenig/AP
The criminal investigation appears to focus on allegations of false comments made by Powell about a renovation of the Federal Reserve headquarters during a congressional hearing in June.
Trump has repeatedly denounced Powell for alleged excessive spending linked to the central bank’s $2.5 billion renovation project. The Federal Reserve attributes the spending overruns to unforeseen cost increases, saying the renovation of its building will ultimately “reduce costs over time by allowing the Board to consolidate most of its operations,” according to the central bank report. website.
Federal law allows the president to remove the chairman of the Federal Reserve for “just cause,” although no president has ever done so. Powell’s term as chairman will expire in May, but he can remain on the Fed’s policymaking council until 2028. Powell has not indicated whether he intends to remain on the council.
