Dow soars 1,000 points as Trump claims talks held with Iran
Photo taken on Aug. 12, 2024 shows the trading floor of the New York Stock Exchange NYSE in New York, the United States. (Liu Yanan/Xinhua via Getty Images)
(NEW YORK) — The Dow Jones Industrial average soared more than 1,000 points on Monday after President Donald Trump claimed “productive conversations” had been held between the U.S. and Iran.
The major stock indexes shed some of the morning’s gains by midday as a flurry of headlines about the Middle East conflict appeared to elicit volatile price fluctuations.
The peace talks — which Iranian officials denied — sent the price of oil plunging on Monday on hopes that negotiations could reopen the Strait of Hormuz and end a weeks-long global energy shock.
The Dow surged 700 points or 1.5%, while the S&P 500 jumped 1.2%. The tech-heavy Nasdaq increased 1.3%.
This is a developing story. Please check back for updates.
U.S. Federal Reserve Chair Jerome Powell. (Li Yuanqing/Xinhua via Getty Images)
(NEW YORK) — An inflation report on Tuesday is set to provide a key gauge of the nation’s economy, just days after reports of a Department of Justice probe into Federal Reserve Chair Jerome Powell brought fresh scrutiny to the independence of the central bank and its capacity to manage price increases.
Economists expect year-over-year inflation to have been left unchanged at 2.7% in December. Inflation stands at its lowest level since July, but it remains nearly a percentage point higher than the Fed’s target rate of 2%, according to the U.S. Bureau of Labor Statistics.
Prices for some high-profile items like coffee and beef continue to soar.
Coffee prices jumped nearly 19% year-over-year in November, the most recent month for which data is available. Beef prices climbed almost 16% over that span. Egg prices plummeted in November, however, falling 13% compared to the previous year.
The onset of elevated inflation alongside sluggish hiring in recent months had put the Fed in a difficult position, even before the DOJ opened a probe into Powell.
The central bank must balance a dual mandate to keep inflation under control and maximize employment. To address pressure on both of its goals, the Fed primarily holds a single tool: interest rates.
The Fed cut interest rates at three consecutive meetings late last year in an effort to boost the flagging labor market. Still, borrowing costs remain well above a 0% rate established at the outset of the COVID-19 pandemic.
The criminal probe into Powell appears to center on allegations of false testimony he made about cost overruns in a renovation of the Fed’s headquarters during a congressional hearing in June.
Powell, who was appointed by Trump in 2017, issued a rare video message on Sunday night rebuking the investigation as a politically motivated effort to influence the Fed’s interest rate policy.
A bipartisan group of economists and former top Fed officials on Monday issued a joint statement condemning the probe as an attempt to undermine the Fed’s political independence.
The investigation follows months of strident criticism leveled at the Fed by President Donald Trump, who has urged the central bank to significantly reduce interest rates. Trump denied any involvement in the criminal investigation during a brief interview with NBC News on Sunday night.
In a statement to ABC News, a spokesperson for Attorney General Pam Bondi said, “The Attorney General has instructed her U.S. Attorneys to prioritize investigating any abuse of taxpayer dollars.”
A longstanding norm of independence usually insulates the Fed from direct political interference.
In the event a central bank lacks independence, policymakers tend to favor lower interest rates as a means of boosting short-term economic activity, analysts previously told ABC News. But, they added, that posture poses a major risk in the possibility of years-long inflation fueled by a rise in consumer demand, untethered by interest rates.
Stocks closed higher on Monday, shrugging off a dip earlier in the day after reports of the DOJ probe into Powell.
Treasury yields, however, also ticked up on Monday, suggesting possible concern about the Fed’s ability to constrain inflation.
Since bonds pay a given investor a fixed amount each year, the specter of inflation risks devaluing the asset and, in turn, makes bonds less attractive. When bond prices fall due to a drop in demand for Treasuries, bond yields rise.
A television station broadcasts the Federal Reserve’s decision to hold rates after a Federal Open Market Committee meeting on the floor of the New York Stock Exchange. (Michael Nagle/Bloomberg via Getty Images)
(NEW YORK) — The Federal Reserve held interest rates steady on Wednesday at its first meeting since the U.S.-Israeli war with Iran drove up gasoline prices and risked a wider bout of inflation.
The central bank’s move marked the second consecutive time it has opted to maintain interest rates at current levels since the outset of 2026. Before that, the Fed cut interest rates a quarter-point three straight times. The decision on Wednesday matched market expectations.
“The implications of developments in the Middle East for the U.S. economy are uncertain,” the Federal Open Market Committee (FOMC), a policymaking body at the Fed, said in a statement on Wednesday.
Elevated price increases have coincided with a slowdown of economic growth, threatening to intensify an economic double-whammy known as “stagflation,” which poses difficulty for the Fed.
If the Fed opts to lower borrowing costs, it could spur growth but risk higher inflation. On the other hand, the choice to raise interest rates may slow price increases but raises the likelihood of a cooldown in economic performance.
The benchmark rate stands at a level between 3.5% and 3.75%. That figure marks a significant drop from a recent peak attained in 2023, but borrowing costs remain well above a 0% rate established at the outset of the COVID-19 pandemic.
A lackluster jobs report last week showed the U.S. economy lost 92,000 jobs in February, which marked a reversal of fortunes for the labor market and erased most of the job gains recorded in 2026.
The unemployment rate ticked up from 4.3% in January to 4.4% in February, the BLS said. Unemployment remains low by historical standards.
A revised government report last week on gross domestic product (GDP) showed the economy grew at a sluggish annualized pace of 0.7% over the final three months of 2025.
Those economic headwinds helped set the conditions before the outbreak of war with Iran, which spiked oil prices and risked price increases for a host of diesel-fuel transported goods.
U.S. crude oil prices rose to about $97 per barrel on Wednesday, marking a surge of more than 50% since a month earlier.
Since the military conflict began, U.S. gas prices have gone up 86 cents to an average of $3.84 per gallon as of Wednesday, according to AAA.
The rate decision on Wednesday marked the first such move since a federal judge blocked Justice Department subpoenas to the Federal Reserve’s Board of Governors after determining the government “produced essentially zero evidence” to support a criminal investigation of Fed Chair Jerome Powell, according to an unsealed court opinion.
“A mountain of evidence suggests that the Government served these subpoenas on the Board to pressure its Chair into voting for lower interest rates or resigning,” U.S. District Judge James Boasberg said in his opinion on Friday.
Acting U.S. Attorney Jeanine Pirro blasted Boasberg as an “activist” judge and pledged to appeal his ruling.
ABC News’ Alexander Mallin, Allison Pecorin, and Jack Date contributed to this report.
Federal Reserve Chair Jerome Powell speaks during a press conference following the Federal Open Markets Committee meeting at the Federal Reserve on January 28, 2026 in Washington, DC. (Kevin Dietsch/Getty Images)
(NEW YORK) — A jobs report to be released on Wednesday will provide a key barometer of the U.S. economy as policymakers grapple with a combination of elevated inflation and sluggish hiring.
The labor market slowed sharply last year, prompting interest rate cuts at the Federal Reserve and concern among some observers about the nation’s economic prospects.
The U.S. added an average of 49,000 jobs each month in 2025, which marked a staggering decline from 168,000 monthly jobs added over the prior year.
Economists expect employers to have hired 55,000 workers in January, amounting to a slight uptick from 50,000 hires in December. Still, the anticipated performance would barely register above the lackluster hiring of a typical month last year.
In a bright spot, however, the unemployment rate remains low by historical standards. Unemployment stood at 4.4% in December, and economists expect that level to have been left unchanged in January.
The U.S. Bureau of Labor Statistics delayed the release of the January data due to a partial government shutdown last week, which helps explain why the jobs report is set to be issued on a Wednesday in the middle of the month, rather than its customary release on the month’s first Friday.
The jobs report will arrive weeks after a series of job cuts that slashed tens of thousands of workers combined at a handful of name-brand companies.
Amazon said last month it planned to cut about 16,000 employees as it seeks to “strengthen” its business by reducing “layers” and “bureaucracy” within its workforce.
A day earlier, UPS announced it plans to cut as many as 30,000 employees this year. Pinterest also unveiled an effort to slash 15% of its staff, according to a securities filing. The company boasts about 4,500 employees worldwide, a securities filing shows.
So far, the cooling labor market has avoided widespread job losses, making the recent flurry of layoffs an outlier, analysts previously told ABC News. The high-profile cuts reflect trends in tech and some other sectors, however, where companies have reversed a pandemic-era hiring blitz and pivoted in response to artificial intelligence.
The Fed slashed interest rates three consecutive times last year in an effort to boost the flagging labor market. In January, the Fed opted to hold interest rates steady, taking a cautious approach due in part to elevated inflation.
The benchmark rate stands at a level between 3.5% and 3.75%. That figure marks a significant drop from a recent peak attained in 2023, but borrowing costs remain well above a 0% rate established at the outset of the COVID-19 pandemic.
Still, Fed Chair Jerome Powell appeared to view the economy in a favorable light, saying it is expanding at a “solid pace” during a Jan. 28 press conference.
“While job gains have remained low, the unemployment rate has shown some signs of stabilization,” Powell added.
Futures markets expect two quarter-point interest rate cuts this year, forecasting the first in June and a second in the fall, according to CME FedWatch Tool, a measure of market sentiment.
