Fed Independence Concerns Weigh on Equities as Commodities Rally

Index Update : U.S. equity futures fell more than 0.5%, with the S&P 500 and Dow retreating from record highs amid rising political and policy uncertainty. Sentiment was weighed down by reports that the Department of Justice subpoenaed Fed Chair Jerome Powell over the Fed’s building restoration, which Powell described as an attempt to remove him due to monetary policy decisions. Financial stocks declined amid broader market weakness, concerns over potential caps on credit card interest rates, and ahead of major bank earnings expected to show slowing revenue growth. Large technology stocks also moved lower as investors reassessed the fundamentals supporting heavy data center capital spending.

Market Movers : On Friday, the top gainers were Rich Sparkle Holdings Limited (+258.88%), followed by NovaBay Pharmaceuticals, Inc. (+102.54%). On the contrary, Aclarion, Inc. (-41.49%), and ATLAS CRITICAL MINERALS CORPORATION (-41.33%) declined the most the same day.

Commodities Update : Oil prices declined on Monday as expectations of a restart in Venezuelan crude exports outweighed geopolitical supply concerns linked to unrest in Iran. WTI crude slipped below $59 per barrel, while Brent fell toward $63 per barrel, retreating from earlier gains. Although escalating protests in Iran and the risk of disruption through the Strait of Hormuz raised supply-side worries—given Iran’s role as OPEC’s fourth-largest producer exporting nearly 2 million barrels per day—markets focused more on the prospect of increased supply from Venezuela. U.S. President Donald Trump indicated that up to 50 million barrels of previously sanctioned Venezuelan crude could be released to the U.S., with tanker shipments already being arranged and the first cargo potentially loading as early as next week.

Gold and silver prices surged to record highs as heightened safe-haven demand was driven by concerns over the Federal Reserve’s independence, expectations of U.S. interest rate cuts, and escalating geopolitical tensions. Gold climbed above $4,590 per ounce, while silver jumped around 5% to near $84 per ounce, supported by uncertainty surrounding pressure on Fed Chair Jerome Powell, weaker-than-expected U.S. job growth, and rising risks linked to unrest in Iran.

Macro Updates : The dollar index fell to around 98.9, snapping a four-day rally as a criminal investigation into Fed Chair Jerome Powell raised concerns over the Federal Reserve’s independence. The currency was further pressured by expectations of additional U.S. rate cuts following weaker-than-expected jobs data, while investors await upcoming inflation figures, major bank earnings, and developments in global geopolitical risks.

Bonds Commentary : U.S. Treasury yields climbed on Monday, with the 10-year yield reaching 4.2%, its highest since late August, and the 30-year yield rising to around 4.86%, as concerns over the Federal Reserve’s independence resurfaced. The move followed comments from Fed Chair Jerome Powell regarding a DOJ criminal investigation tied to the Fed’s headquarters renovation, which he framed as pressure linked to monetary policy decisions. Investors are also awaiting key economic data this week, particularly the CPI report, which is expected to show firmer inflation and support expectations that the Fed will keep rates unchanged at its upcoming meeting.

Futures Update : U.S. stock futures declined at the start of the week as investors returned to markets amid renewed concerns surrounding the Federal Reserve’s independence. Dow futures were down 244 points, or 0.5%, while S&P 500 futures fell 39 points, or 0.6%. Nasdaq 100 futures underperformed, sliding 212 points, or 0.8%. The weakness followed Friday’s session in which the S&P 500 reached a new record high, supported by strong gains in semiconductor stocks. Meanwhile, markets largely looked past a weaker-than-expected U.S. employment report, as it did not materially change expectations for further interest rate cuts by the Fed later this year.

Stocks exhibited a lack of clear direction early in Friday's session but generally moved higher throughout the trading day. All major averages closed firmly in positive territory, with the Dow and S&P 500 reaching new record highs. The S&P 500 gained 44.84 points, or 0.65%, finishing at 6,966.29. From a technical standpoint, the index remains above its key support zone and continues to demonstrate upward momentum. However, prices are approaching a critical resistance area—an external liquidity range—which suggests the index may experience some mild correction. The 14-day Relative Strength Index (RSI) remains above the midpoint, indicating sustained positive sentiment. The key support level is around 6,877, a significant threshold that could prompt a rebound, while resistance is expected near 6,990.