WASHINGTON (dpa-AFX) - Stocks moved to the downside at the start of trading on Monday but showed a notable recovery over the course of the session. The major averages climbed well off their lows of the session and into positive territory, with the Dow and the S&P 500 reaching new record closing highs.
The major averages pulled back off their levels going into the close going into the end of the day but remained positive. The Dow rose 86.13 points or 0.2 percent to 49,590.29, the Nasdaq climbed 62.56 points or 0.3 percent to 23,733.90 and the S&P 500 increased 10.99 points or 0.2 percent to 6,977.27.
The initial pullback on Wall Street partly reflected concerns about the Federal Reserve's independence after Fed Chair Jerome Powell revealed that the U.S. central bank has been served subpoenas by the Department of Justice that threaten criminal charges.
'On Friday, the Department of Justice served the Federal Reserve with grand jury subpoenas, threatening a criminal indictment related to my testimony before the Senate Banking Committee last June,' Powell said in a video statement released by the Fed on Sunday. 'That testimony concerned in part a multi-year project to renovate historic Federal Reserve office buildings.'
U.S. media reports said Federal prosecutors have launched a criminal investigation of Powell over his June testimony to Congress regarding the $2.5 billion renovation project for three buildings, including the Eccles building that serves as the headquarters of the Fed.
Powell termed this action 'unprecedented' and ascribed it to President Donald Trump's ongoing threats and pressure on the Fed to lower interest rates.
The top official expressed his deep respect for the rule of law and for accountability in our democracy, adding that the Fed chair was not above the law.
'Trump wants to lower borrowing costs, so consumers and businesses spend more money and propel the economy,' said Russ Mould, investment director at AJ Bell.
He added, 'However, what's worrying markets now over Trump's implied intervention is that the loss of Fed independence could lead to inflation getting out of control.'
Selling pressure waned over the course of the session, however, as traders remain optimistic about the outlook for interest rates.
While the Fed is widely expected to leave interest rates unchanged at its next meeting later this month, the central bank is still seen as likely to cut rates by at least another quarter point in the coming months.
Sector News
Computer hardware stocks turned in some of the market's best performances on the day, with the NYSE Arca Computer Hardware Index spiking by 5.0 percent.
A sharp increase by the price of gold also contributed to substantial strength among gold stocks, as reflected by the 3.5 percent surge by the NYSE Arca Gold Bugs Index.
Steel and networking stocks also moved to the upside over the course of the session, while weakness remained visible among airline and oil service stocks.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. While Japan's Nikkei 225 Index shot up by 1.6 percent, China's Shanghai Composite Index jumped by 1.1 percent.
Most European stocks also moved to the upside on the day. The German DAX Index climbed by 0.6 percent and the U.K.'s FTSE 100 Index rose by 0.2 percent, although the French CAC 40 Index bucked the uptrend and closed just below the unchanged.
In the bond market, treasuries regained some ground after an early slump but still ended the day in negative territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, increased by 1.6 basis points to 4.187 percent.
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