New York — Shares of credit card companies fell Monday after President Donald Trump threatened action That could eat into their profits. Meanwhile, the rest of Wall Street is showing only modest signs of anxiety beyond that Tensions escalated to a much higher level Between the White House and the Federal Reserve.
S&The P 500 erased a small loss from the morning and rose 0.1% from All-time highs It was set for Friday, as US stocks drifted through mixed trading. The Dow Jones Industrial Average was down 81 points, or 0.2%, as of noon ET, and the Nasdaq Composite was up 0.3%.
Some nervousness remains evident in the market, amid concerns that the Federal Reserve may be on the path toward less independence in setting interest rates to keep inflation under control. Prices of gold and other investments that tend to do well when investors are nervous rose, while the value of the US dollar also fell against other currencies.
On Wall Street, credit card companies hit the biggest declines, with Synchrony Financial down 8.2%, Capital One Financial down 6.4%, and American Express down 4.5%. They weakened after Trump said he wanted to put a 10% cap on credit card interest rates for a year. Such a move could erode credit card companies’ profits.
But it was a separate move by Trump that captured the most attention in financial markets. Over the weekend, the Chairman of the Federal Reserve told the US Department of Justice The Fed called He threatened to file a criminal indictment over his testimony about renovations at its headquarters.
In an unusual video statement released Sunday, Fed Chairman Jerome Powell said his testimony and renewals are “pretexts” for threatening criminal charges, which is in fact “a result of the Fed setting interest rates based on our best assessment of what will serve the public, rather than following the president’s preferences.”
The Fed has been locked in a dispute with Trump, who has loudly called for lower interest rates to make borrowing cheaper for American households and businesses and give the economy a boost. The Fed cut its key interest rate three times last year and signaled that more cuts could arrive this year, but it moved so deliberately that Trump called Powell “too late.”
In a brief interview with NBC News on Sunday, Trump insisted that he had no knowledge of the investigation into Powell. When asked if the investigation was intended to pressure Powell on interest rates, Trump said: “No. I wouldn’t even consider doing it that way.”
the The Fed has traditionally acted separately From the rest of Washington, and makes its decisions without having to submit to political whims. Such independence, this ideology holds, gives it the freedom to keep interest rates high when necessary to reduce high inflation, even if doing so slows the economy and frustrates politicians seeking to please voters.
In the bond market, the yield on the 10-year Treasury note rose briefly to 4.21%, up from 4.18% late Friday, on concerns that a less independent Federal Reserve could lead to higher inflation in the longer term. But it later fell to 4.18%.
The concerns also affected the value of the US dollar, which fell by 0.3% against the euro and 0.4% against the Swiss franc.
Financial markets may be dismissing concerns about the Fed’s independence for several reasons. Traders could see “limits to the White House getting its way,” according to Terry Weissman, a strategist at Macquarie Group, because Congress could refuse to confirm any Fed nominees from the White House.
“The independence and credibility of the Department of Justice is now in question,” Sen. Thom Tillis, a Republican from North Carolina, said on social media. “I will oppose the confirmation of any Fed nominee — including the upcoming vacancy for Fed Chair — until this legal matter is fully resolved.”
Trump has already sharply criticized the Fed, and is currently trying to fire Fed Governor Lisa Cook, but the Fed’s interest rate-setting committee still appears to be acting independently.
Additionally, this latest move could encourage Powell to stay at the Fed as governor until his term ends in 2028, even though his term as chair will end in May, said Brian Jacobsen, chief economist at Annex Wealth Management.
“Given the political pressure on the Fed, he may choose to remain in his position as governor out of spite,” he said. “That would deprive President Trump of the ability to stack the board with another appointee.”
On Wall Street, Abercrombie & Fitch shares fell 15.7% after the retailer presented a forecast range for earnings in the fourth quarter of 2025 whose midpoint was below analysts’ expectations. Its revenue growth expectations were lower than Wall Street expectations.
On the winning side of the market was Walmart stock, which rose 3.6% after learning that its shares would join the widely watched Nasdaq 100 index. Google also said on Sunday that it is expanding shopping features in its system AI chatbot through collaboration with Walmart And many other large retailers.
The price of gold rose 2.8% to $4,626.80 per ounce and is heading towards another record level.
In overseas stock markets, indices rose in most parts of Europe and Asia. Stocks jumped 1.4% in Hong Kong and 1.1% in Shanghai, achieving two of the biggest gains in the world after reports that Chinese leaders are preparing for more aid to the economy.
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AP Business Writers Matt Ott and Ellen Kurtenbach contributed.