US Stock Market Today: Dow Slumps 400 Points As Probe Against Fed Chair Turns Wall Street Jittery

The Dow Jones Industrial Average slumped over 400 points on Monday, as the Wall Street turned jittery after Federal Reserve Chair Jerome Powell was served with subpoenas by the Department of Justice.

Shortly after the opening bell, Dow Jones hit a low of 49,011.31, down 492.76 points or 1% as against the previous day's close.

The wider index, S&P 500, was down 32.21 points or 0.47% at 6,934.07, whereas the tech-heavy Nasdaq Composite slipped 108.37 points or 0.46% to 23,562.97.

Notably, Powell was issued the subpoenas by the DoJ on Friday, warning him of criminal indictment. The issue relates to testimony he gave before the Senate Banking Committee last June, regarding the renovation of the Fed's historic Washington headquarters, a project amounting to $2.5 billion.

The Fed chair has called the DoJ action as politically-motivated. He has been at loggerheads with Trump over the past year, as the Fed has restricted the pace of rate reduction despite the President calling for accelerated cuts.

Even as the equity market felt the jitters of Fed-versus-Trump face-off, the commodities market continued to soar. The DoJ action has fuelled expectations of an earlier replacement of Powell with a Fed chair who is more in favour of rate cuts.

Gold and silver, being non-yielding assets, gain popularity on the prospects of lower Fed rates. The yellow metal peaked to a record high of $4,600 an ounce, whereas the white metal crossed the $84-mark.

Bank Stocks Plunge

Banking stocks were the major laggards in early trade, as Trump's weekend announcement to cap credit card rates at 10% caused some of the sectoral majors to slip.

Citigroup was down nearly 4% at $116.67, whereas CapitalOne plunged over 11% to $228.7.

JPMorgan and Bank of America's shares also declined by more than 2%.

Chip Stocks Trade Mixed

Semiconductor stocks, which are seen among the key market movers in recent months, traded mixed in early trade. AI hot-bet Nvidia was flat at $185.04, Intel slipped 1.15% to $45.02, and Micron Technology was down marginally by 0.9% to $344.8.

However, AMD rose 2.25% to $207.74, and Broadcom was up 1.78% at $351.1.