U.S. Stocks Fall, Gold and Silver Soar to New Highs After Trump Threatens Federal Reserve's Independence

Stocks, bonds, and the U.S. dollar came under pressure after the U.S. president ramped up his campaign to attack the Federal Reserve.

The S&P 500 index decreased 0.7%, the tech-heavy Nasdaq declined 0.9%, and the U.S. dollar eased against all major currencies. 

Last week, global markets extended early gains after a choppy week of trading as investors overlooked rising geopolitical tensions. U.S. Treasury yields and crude oil held steady, and gold advanced as investors debated future rate paths.

However, the market's mood was decisively negative after the U.S. Justice Department opened an investigation into Federal Reserve Chair Jerome Powell's testimony to the U.S. lawmakers regarding the renovation project. 

The Department of Justice's criminal investigation is related to Powell's testimony to the Senate Banking Committee on the renovation of office buildings.  

Powell shot back in a statement saying that this is not about renovation but yet another attempt by Mr. Trump to intimidate the central bank and bend the monetary policy to his liking. 

"The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President," said Fed Chair Powell in a statement. 

"This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions—or whether instead monetary policy will be directed by political pressure or intimidation," added Fed Chair Powell.  

Powell's term as Federal Reserve Chairman is set to end in May, and the central bank is likely to lower rates at least two times in 2026 but stay put at the end of the next meeting later this month.  

U.S. Stock Movers 

Banks came under pressure after the U.S. president demanded to lower interest rates on credit card loans to 10%. 

JP Morgan Chase, Citigroup, Wells Fargo, and Bank of America decreased between 3% and 5%. 

Gold jumped 2% to $4,589.95, and silver advanced 5% to $84.14 following Trump's renewed attack on the Fed's independence. 

On the earnings front, JPMorgan, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, PNC Financial Services, BlackRock, Delta Airlines, and KB Home are set to report quarterly results this week. 

U.S. Stocks Fall, Gold and Silver Soar to New Highs After Trump Threatens Federal Reserve's Independence

Stocks, bonds, and the U.S. dollar came under pressure after the U.S. president ramped up his campaign to attack the Federal Reserve.

The S&P 500 index decreased 0.7%, the tech-heavy Nasdaq declined 0.9%, and the U.S. dollar eased against all major currencies. 

Last week, global markets extended early gains after a choppy week of trading as investors overlooked rising geopolitical tensions. U.S. Treasury yields and crude oil held steady, and gold advanced as investors debated future rate paths.

However, the market's mood was decisively negative after the U.S. Justice Department opened an investigation into Federal Reserve Chair Jerome Powell's testimony to the U.S. lawmakers regarding the renovation project. 

The Department of Justice's criminal investigation is related to Powell's testimony to the Senate Banking Committee on the renovation of office buildings.  

Powell shot back in a statement saying that this is not about renovation but yet another attempt by Mr. Trump to intimidate the central bank and bend the monetary policy to his liking. 

"The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President," said Fed Chair Powell in a statement. 

"This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions—or whether instead monetary policy will be directed by political pressure or intimidation," added Fed Chair Powell.  

Powell's term as Federal Reserve Chairman is set to end in May, and the central bank is likely to lower rates at least two times in 2026 but stay put at the end of the next meeting later this month.  

U.S. Stock Movers 

Banks came under pressure after the U.S. president demanded to lower interest rates on credit card loans to 10%. 

JP Morgan Chase, Citigroup, Wells Fargo, and Bank of America decreased between 3% and 5%. 

Gold jumped 2% to $4,589.95, and silver advanced 5% to $84.14 following Trump's renewed attack on the Fed's independence. 

On the earnings front, JPMorgan, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, PNC Financial Services, BlackRock, Delta Airlines, and KB Home are set to report quarterly results this week. 

Japan's Indexes Advanced Monday and Yen Drifted Lower O

Japan's stocks advanced Monday amid easing trade tensions with China. 

The Nikkei 225 Stock Average increased 1.6%, the broader Topix Index gained 0.9%, and the yen weakened further to 158.07 against the U.S. dollar.

Market sentiment improved in Tokyo after China clarified that its export control on dual-use goods and technology applies for military use only, easing worries about civilian use.

Japan's benchmark indexes extended the previous week's gains as investors reviewed the unexpected increase in household spending driven by winter purchases. 

The yen continued to drift towards a one-year low as the U.S. dollar edged up in international trading, and Japanese companies are likely to report higher earnings partly driven by the yen's weakness. 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average increased 1.6% to 51,939.89, and the broader Topix added 0.9% to 3,514.11. 

Defense stocks extended gains for the fourth week in a row amid expectations of higher government spending and looser export control.

IHI Corp. gained 3.2% to ¥3,235.0, Kawasaki Heavy Industries jumped 3.1% to ¥12,370.0, and Mitsubishi Heavy Industries inched up 0.1% to ¥4,267.0. 

Banks and financial services providers increased as the traders anticipated the Bank of Japan to continue to raise interest rates at least two times in 2026. 

Sumitomo Mitsui Financial Group increased 2.9% to ¥5,253.0, Mitsubishi UFJ Financial advanced 1.5% to ¥2,642.0, and Mizuho Financial gained 2.2% to ¥6,195.0. 

China Markets Extended Previous Week's Gains

Stocks in mainland China and Hong Kong advanced Monday, and investors increased exposure to high-flying technology stocks. 

The Hang Seng Index increased 0.8%, and the mainland-focused CSI 300 index edged up 0.4% as investors reviewed mixed inflation data released last Friday.

Investors held out for higher earnings in the fourth quarter, driving benchmark indexes to new highs as foreign investors continue to participate in initial public offerings.

China's economic growth is expected to meet the rate of 5% in 2025, and investors are anticipating the economy to expand at a slower pace of 4.5% in 2026. 

Moreover, China's jobless rate is likely to remain elevated as many companies shift production overseas and automate domestic manufacturing. 

The youth jobless rate in 2026 is likely to stay above 22%, matching the rate in 2025, according to private estimates. 

China Indexes and Stocks

The Hang Seng Index increased 0.8% to 26,435.12, and the mainland-focused CSI 300 index added 0.4% to 4,779.95.

Food delivery platform operators were in focus after Chinese authorities launched a market competition probe. 

Meituan jumped 7.2% to HK $105.60, and Taobao mall operator Alibaba Group gained 5% to HK $154.30. 

The delivery platform operator soared on expectations that the government probe would limit future price competition, helping the companies improve their operating margins. 

Across Asia, benchmark indexes in Japan increased 1.6%, in India decreased 0.5%, and in Indonesia advanced 0.7%. 

China Markets Extended Previous Week's Gains

Stocks in mainland China and Hong Kong advanced Monday, and investors increased exposure to high-flying technology stocks. 

The Hang Seng Index increased 0.8%, and the mainland-focused CSI 300 index edged up 0.4% as investors reviewed mixed inflation data released last Friday.

Investors held out for higher earnings in the fourth quarter, driving benchmark indexes to new highs as foreign investors continue to participate in initial public offerings.

China's economic growth is expected to meet the rate of 5% in 2025, and investors are anticipating the economy to expand at a slower pace of 4.5% in 2026. 

Moreover, China's jobless rate is likely to remain elevated as many companies shift production overseas and automate domestic manufacturing. 

The youth jobless rate in 2026 is likely to stay above 22%, matching the rate in 2025, according to private estimates. 

China Indexes and Stocks

The Hang Seng Index increased 0.8% to 26,435.12, and the mainland-focused CSI 300 index added 0.4% to 4,779.95.

Food delivery platform operators were in focus after Chinese authorities launched a market competition probe. 

Meituan jumped 7.2% to HK $105.60, and Taobao mall operator Alibaba Group gained 5% to HK $154.30. 

The delivery platform operator soared on expectations that the government probe would limit future price competition, helping the companies improve their operating margins. 

Across Asia, benchmark indexes in Japan increased 1.6%, in India decreased 0.5%, and in Indonesia advanced 0.7%. 

U.S. Movers: Costco Wholesale, General Motors, Tilray Brands

General Motors decreased 0.9% to $84.49 after the company disclosed a $7.1 billion charge in the fourth quarter of 2025 linked to its electric vehicle operations and restructuring in China. 

Tilray Brands soared 10% to $10.0, and the cannabis company reported record revenue in the fiscal second quarter. 

Net revenue increased 3% to $217.5 million from $211 million, net loss improved to $43.5 million from $85.3 million, and diluted loss per share improved to 41 cents from 99 cents a year ago. 

Costco Wholesale Corp. extended its two-day gain to 5% and rose to $919.71 after the company's December sales rose. 

U.S. core comparable store sales rose 6.3% in December, on top of 9.8% in the month a year ago, indicating solid performance over two years despite the tough comparison.

U.S. Movers: Costco Wholesale, General Motors, Tilray Brands

General Motors decreased 0.9% to $84.49 after the company disclosed a $7.1 billion charge in the fourth quarter of 2025 linked to its electric vehicle operations and restructuring in China. 

Tilray Brands soared 10% to $10.0, and the cannabis company reported record revenue in the fiscal second quarter. 

Net revenue increased 3% to $217.5 million from $211 million, net loss improved to $43.5 million from $85.3 million, and diluted loss per share improved to 41 cents from 99 cents a year ago. 

Costco Wholesale Corp. extended its two-day gain to 5% and rose to $919.71 after the company's December sales rose. 

U.S. core comparable store sales rose 6.3% in December, on top of 9.8% in the month a year ago, indicating solid performance over two years despite the tough comparison.

U.S. Movers: Costco Wholesale, General Motor

General Motors decreased 0.9% to $84.49 after the company disclosed a $7.1 billion charge in the fourth quarter of 2025 linked to its electric vehicle operations and restructuring in China. 

Tilray Brands soared 10% to $10.0, and the cannabis company reported record revenue in the fiscal second quarter. 

Net revenue increased 3% to $217.5 million from $211 million, net loss improved to $43.5 million from $85.3 million, and diluted loss per share improved to 41 cents from 99 cents a year ago. 

Costco Wholesale Corp. extended its two-day gain to 5% and rose to $919.71 after the company's December sales rose. 

U.S. core comparable store sales rose 6.3% in December, on top of 9.8% in the month a year ago, indicating solid performance over two years despite the tough comparison.

U.S. Labor Market Expansion Moderated In December, Supreme Court's Tariff Ruling In Focus

Stocks on Wall Street lacked momentum on Friday ahead of a jobs report and a potential U.S. Supreme Court ruling on trade tariffs. 

The S&P 500 index edged up a fraction, and the tech-heavy Nasdaq Composite inched lower as investors rotated away from high-flying artificial intelligence stocks. 

U.S. Job Growth Slowed In December and 2025 

December nonfarm payrolls growth slowed to 50,000 as healthcare and professional services continue to expand but showed little or no change in other industries, including mining, manufacturing, and construction.  

However, payroll data were revised downwards for the months of October and November. 

The change in total nonfarm payroll employment for October was revised down by 68,000, from a contraction of 105,000 to 173,000, and the change for November was revised down by 8,000, from a gain of 64,000 to 56,000. 

With these revisions, employment in October and November combined is 76,000 lower than previously reported.

The jobless rate was little changed at 4.4%, and the average hourly wage gained 3.8% from a year ago to $37.02. 

For the full year 2025, payroll employment increased 584,000, or about a monthly increase of 49,000, and less than the increase of 2.0 million in 2024. 

The U.S. Supreme Court is likely to strike down the Trump administration's global tariffs, confirming rulings from two lower courts. 

The apex court sent mixed signals during cross-examination of the U.S. solicitor, and most court trade policy analysts are hoping that the court's ruling could force the Trump administration to levy new tariffs using a different set of rules. 

The adverse ruling from the court could also impact the financial position of the U.S. federal government, as most of the tariff revenue has been used for government spending and interest payments. 

U.S. Movers 

General Motors decreased 0.9% to $84.49 after the company disclosed a $7.1 billion charge in the fourth quarter of 2025 linked to its electric vehicle operations and restructuring in China. 

Tilray Brands soared 10% to $10.0, and the cannabis company reported record revenue in the fiscal second quarter. 

Net revenue increased 3% to $217.5 million from $211 million, net loss improved to $43.5 million from $85.3 million, and diluted loss per share improved to 41 cents from 99 cents a year ago. 

Costco Wholesale Corp. extended its two-day gain to 5% and rose to $919.71 after the company's December sales rose. 

U.S. core comparable store sales rose 6.3% in December, on top of 9.8% in the month a year ago, indicating solid performance over two years despite the tough comparison.

U.S. Labor Market Expansion Moderated In December, Supreme Court's Tariff Ruling In Focus

Stocks on Wall Street lacked momentum on Friday ahead of a jobs report and a potential U.S. Supreme Court ruling on trade tariffs. 

The S&P 500 index edged up a fraction, and the tech-heavy Nasdaq Composite inched lower as investors rotated away from high-flying artificial intelligence stocks. 

December nonfarm payrolls are likely to increase between 45,000 and 50,000 as the healthcare and professional services continue to expand. 

However, investors are also bracing for a sharp downward revision in November and September payrolls data as the statistical office processes a wider set of survey responses. 

The U.S. Supreme Court is likely to strike down the Trump administration's global tariffs, confirming rulings from two lower courts. 

The apex court sent mixed signals during cross-examination of the U.S. solicitor, and most court trade policy analysts are hoping that the court's ruling could force the Trump administration to levy new tariffs using a different set of rules. 

The adverse ruling from the court could also impact the financial position of the U.S. federal government, as most of the tariff revenue has been used for government spending and interest payments. 

U.S. Movers 

General Motors decreased 0.9% to $84.49 after the company disclosed a $7.1 billion charge in the fourth quarter of 2025 linked to its electric vehicle operations and restructuring in China. 

Tilray Brands soared 10% to $10.0, and the cannabis company reported record revenue in the fiscal second quarter. 

Net revenue increased 3% to $217.5 million from $211 million, net loss improved to $43.5 million from $85.3 million, and diluted loss per share improved to 41 cents from 99 cents a year ago. 

Costco Wholesale Corp. extended its two-day gain to 5% and rose to $919.71 after the company's December sales rose. 

U.S. core comparable store sales rose 6.3% in December, on top of 9.8% in the month a year ago, indicating solid performance over two years despite the tough comparison.

Japan's Personal Spending Unexpectedly Advanced In November, Nikkei 225 Jumped 1.6%

Stock market indexes in Tokyo extended weekly gains amid hopes that trade tensions between Japan and China are likely to ease. 

The Nikkei 225 Stock Average gained 1.6%, and the broader Topix advanced 0.9% after China clarified that the latest export control on dual-use goods to Japan would not apply for civilian purposes. 

China's easing of the latest trade sanctions combined with the surprise increase in household spending in November contributed to the market advance on Friday. 

Japan's Household Spending Advanced In November

Japan's household spending in November unexpectedly rose despite higher food prices, the Ministry of Internal Affairs & Communications reported Friday.

Households with two or more people spent an average of 314,242 yen, or $2,000, and rose 2.9% after adjusting for inflation. 

Real household spending increased 2.9% from a year ago, the first advance in two months and the largest increase since May, driven by winter purchases despite higher food prices. 

Food spending, which accounts for 30% of household expenditure, inched higher 0.9%; furniture and home appliance spending advanced 10.6%; transportation and communications soared 20.4%; and utility outlays eased 1.2%. 

Economists closely watch household spending data, as private consumption accounts for more than half of Japan's gross domestic product.  

Household income with at least two individuals inched lower 2.2% after adjusting for inflation to 519,304 yen, the ministry added. 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average rose 1.6% to 51,936.21, and the broader Topix Index gained 0.9% to 3,514.41. 

For the week, the Nikkei 225 Stock Average advanced 0.7%, and the Topix Index increased 1.4%. 

Fast Retailing Co. Ltd. soared 10.6% to ¥62,750.0 after the company raised its full-year earnings outlook. 

Revenue in the quarter ending in November rose 14.8% to 1.03 trillion yen, profit attributable to shareholders increased 11.7% to 147.4 billion yen, and diluted earnings per share jumped to 479.89 from 429.51 a year ago. 

Japan's Personal Spending Unexpectedly Advanced In November, Nikkei 225 Jumped 1.6%

Stock market indexes in Tokyo extended weekly gains amid hopes that trade tensions between Japan and China are likely to ease. 

The Nikkei 225 Stock Average gained 1.6%, and the broader Topix advanced 0.9% after China clarified that the latest export control on dual-use goods to Japan would not apply for civilian purposes. 

China's easing of the latest trade sanctions combined with the surprise increase in household spending in November contributed to the market advance on Friday. 

Japan's Household Spending Advanced In November

Japan's household spending in November unexpectedly rose despite higher food prices, the Ministry of Internal Affairs & Communications reported Friday.

Households with two or more people spent an average of 314,242 yen, or $2,000, and rose 2.9% after adjusting for inflation. 

Real household spending increased 2.9% from a year ago, the first advance in two months and the largest increase since May, driven by winter purchases despite higher food prices. 

Food spending, which accounts for 30% of household expenditure, inched higher 0.9%; furniture and home appliance spending advanced 10.6%; transportation and communications soared 20.4%; and utility outlays eased 1.2%. 

Economists closely watch household spending data, as private consumption accounts for more than half of Japan's gross domestic product.  

Household income with at least two individuals inched lower 2.2% after adjusting for inflation to 519,304 yen, the ministry added. 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average rose 1.6% to 51,936.21, and the broader Topix Index gained 0.9% to 3,514.41. 

For the week, the Nikkei 225 Stock Average advanced 0.7%, and the Topix Index increased 1.4%. 

Fast Retailing Co. Ltd. soared 10.6% to ¥62,750.0 after the company raised its full-year earnings outlook. 

Revenue in the quarter ending in November rose 14.8% to 1.03 trillion yen, profit attributable to shareholders increased 11.7% to 147.4 billion yen, and diluted earnings per share jumped to 479.89 from 429.51 a year ago. 

China's Inflation Reports Confirmed Weak Demand, Three New Issues List In Hong Kong

China's markets lacked direction after December's inflation reading confirmed an ongoing economic slowdown.  

The Hang Seng Index and the CSI 300 Index hovered near the flatline amid macroeconomic worries. 

China's Inflation Data Confirmed Weak Domestic Demand

Consumer price inflation in December rose 0.8% from a year ago, accelerating from 0.7% in November, and rose at the fastest pace since February 2023. 

Prices rose for the third consecutive month, driven by an acceleration in food price inflation to 1.1% from 0.2% in the previous month, according to the National Bureau of Statistics. 

Core inflation, which excludes food and energy prices, held at an annual pace of 1.2% and hovered at a 20-month high. 

Consumer price inflation for 2025 was flat, below the official target of around 2%. 

Producer price inflation, which measures wholesale prices, declined 1.9% from a year ago in December, according to a separate report released by the statistical agency.

Wholesale prices contracted for the 39th month in a row, as several industries struggle with persistent demand weakness and overcapacity. 

For the full year of 2025, producer price inflation shrank 2.6%.

China Indexes and Stocks 

The Hang Seng Index decreased 0.02% to 26,146.01, and the mainland-focused CSI 300 Index increased 0.1% to 4,742.44. 

For the week, the Hang Seng Index decreased 0.8%, and the CSI 300 Index gained 1.7%. 

Three new issues began trading on the Hong Kong Stock Exchange on Friday, as foreign investors pile into initial public offerings. 

MiniMax Group soared 76% to HK $291.00, and the artificial intelligence-focused company priced its offering at HK $165.0 per share. 

The AI foundation model company raised HK $4.8 billion in gross proceeds through the sale of 29.2 million shares. 

Yunnan Jinxun Resources jumped 25% to HK $36.80, and the copper mining company priced its offering at HK $30.0 per share. 

The manufacturer of copper cathodes with mining operations in Zambia and DR Congo raised gross proceeds of HK $1.1 billion through the sale of 36.8 million shares. 

Suzhou Ribo Life Science advanced 27% to HK $74.40, and the company priced its offering at HK $57.97 per share. 

The thrombotic disease-focused company raised HK $1.2 billion in gross proceeds through the sale of 31.6 million shares. 

China's Inflation Reports Confirmed Weak Demand, Three New Issues List In Hong Kong

China's markets lacked direction after December's inflation reading confirmed an ongoing economic slowdown.  

The Hang Seng Index and the CSI 300 Index hovered near the flatline amid macroeconomic worries. 

China's Inflation Data Confirmed Weak Domestic Demand

Consumer price inflation in December rose 0.8% from a year ago, accelerating from 0.7% in November, and rose at the fastest pace since February 2023. 

Prices rose for the third consecutive month, driven by an acceleration in food price inflation to 1.1% from 0.2% in the previous month, according to the National Bureau of Statistics. 

Core inflation, which excludes food and energy prices, held at an annual pace of 1.2% and hovered at a 20-month high. 

Consumer price inflation for 2025 was flat, below the official target of around 2%. 

Producer price inflation, which measures wholesale prices, declined 1.9% from a year ago in December, according to a separate report released by the statistical agency.

Wholesale prices contracted for the 39th month in a row, as several industries struggle with persistent demand weakness and overcapacity. 

For the full year of 2025, producer price inflation shrank 2.6%.

China Indexes and Stocks 

The Hang Seng Index decreased 0.02% to 26,146.01, and the mainland-focused CSI 300 Index increased 0.1% to 4,742.44. 

For the week, the Hang Seng Index decreased 0.8%, and the CSI 300 Index gained 1.7%. 

Three new issues began trading on the Hong Kong Stock Exchange on Friday, as foreign investors pile into initial public offerings. 

MiniMax Group soared 76% to HK $291.00, and the artificial intelligence-focused company priced its offering at HK $165.0 per share. 

The AI foundation model company raised HK $4.8 billion in gross proceeds through the sale of 29.2 million shares. 

Yunnan Jinxun Resources jumped 25% to HK $36.80, and the copper mining company priced its offering at HK $30.0 per share. 

The manufacturer of copper cathodes with mining operations in Zambia and DR Congo raised gross proceeds of HK $1.1 billion through the sale of 36.8 million shares. 

Suzhou Ribo Life Science advanced 27% to HK $74.40, and the company priced its offering at HK $57.97 per share. 

The thrombotic disease-focused company raised HK $1.2 billion in gross proceeds through the sale of 31.6 million shares. 

U.S. Indexes Hovered Near Record High Amid Earnings Optimism

Stocks on Wall Street flatlined amid a lack of immediate catalysts and ahead of the start of the earnings season next week. 

The S&P 500 index and the Nasdaq Composite were nearly unchanged in early trading Thursday, and the S&P 500 index recorded a new intraday high in the previous session. 

Alphabet Inc. advanced more than 2% in Wednesday's trading, and the parent company of search engine Google's market cap surpassed Apple's market capitalization for the first time since 2019.  

On the economic front, investors are awaiting the release of nonfarm payrolls data on Friday, and December's payrolls are expected to rise 45,000. 

However, after accounting for a wider survey response, September and November payrolls are likely to be trimmed. 

U.S. Movers

Valero Energy advanced 2.2% to $183.86, and Marathon Petroleum added 1.2% to $172.51 after U.S. Energy Secretary Chris Wright said that the U.S. will control Venezuela's oil "indefinitely."

Moreover, the U.S. president claimed that Venezuela plans to purchase U.S. pharmaceuticals, grains, and power transmission equipment in return for selling crude oil to the U.S. 

JPMorgan Chase, Bank of New York, and Delta Airlines are set to kick off unofficial earnings season next Tuesday.