Stocks fall after Trump’s DOJ opens criminal probe into Fed Chair Powell
Money Cash Stocks Decline ( Anton Petrus/Getty Images)
(NEW YORK) — Stocks slid in early trading on Monday hours after reports that the Department of Justice had opened a criminal investigation into Federal Reserve Chair Jerome Powell centered on the central bank leader’s remarks to Congress about an office renovation project.
Powell, who was appointed by Trump in 2017, issued a rare video message rebuking the investigation as a politically motivated effort to influence the Fed’s interest rate policy.
The Dow Jones Industrial Average fell 290 points, or 0.6%, while the S&P 500 fell 0.4%. The tech-heavy Nasdaq declined 0.3%.
The selloff on Monday also appeared to include reaction to a social media post from President Donald Trump advocating for a 10% cap on credit card interest rates for one year. Shares of several major banks fell in early trading.
The DOJ’s criminal probe follows a a monthslong influence campaign undertaken by Trump as he has frequently slammed the Fed for what he considers a reluctance to significantly reduce interest rates.
The criminal probe appears to center on allegations of false remarks made by Powell about a renovation of the Fed’s headquarters during a congressional hearing in June.
Trump has repeatedly denounced Powell for alleged overspending tied to the central bank’s $2.5 billion renovation project. The Fed attributes spending overruns to unforeseen cost increases, saying that its building renovation will ultimately “reduce costs over time by allowing the Board to consolidate most of its operations,” according to the central bank’s website.
Federal law allows the president to remove the Fed chair for “cause” — though no president has ever done so. Powell’s term as chair is set to expire in May, but he can remain on the Fed’s policymaking board until 2028. Powell has not indicated whether he intends to remain on the board.
Venezuelan President Nicolas Maduro (center) is celebrated by participants at a rally marking the anniversary of a battle on the day Venezuelan opposition leader Machado was awarded the Nobel Peace Prize. (Jesus Vargas/picture alliance via Getty Images)
(NEW YORK) — Oil prices jumped about 3% after President Donald Trump this week threatened to blockade all sanctioned oil tankers traveling in and out of Venezuela.
Venezuela, which has the largest known oil reserves in the world, exports hundreds of thousands of barrels of oil each day.
The threatened blockade risks a reduction of global oil supply and an amplification of geopolitical uncertainty — both of which could further push up oil prices and, in turn, pinch drivers at the pump, some analysts told ABC News.
But, they added, the effect on prices will likely remain muted unless the conflict escalates significantly, since Venezuela accounts for less than 1% of global oil output and most of its oil is sold on the black market.
Here’s what to know about what the threatened U.S. blockade means for oil and gasoline prices:
Where does the blockade stand and how has Venezuela responded? On Tuesday, Trump threatened what he called a “blockade” of all sanctioned oil tankers traveling in and out of Venezuela, ratcheting up pressure on the Venezuelan President Nicolas Maduro, whose government depends in part on revenue derived from oil sales.
“Venezuela is completely surrounded by the largest Armada ever assembled in the History of South America,” Trump wrote in a social media post. “It will only get bigger, and the shock to them will be like nothing they have ever seen before.”
A day later, Maduro said Venezuela would continue to trade oil, defying Trump’s threat.
“Trade in and out will continue — our oil and all our natural wealth that by the constitution and Bolivar’s legacy belongs — our wealth, our land, and our oil — to its only legitimate owner, which for centuries and centuries has been our sovereign people of Venezuela,” Maduro said on Wednesday, originally in Spanish.
The U.S. currently has 11 warships in the Caribbean — the most in decades — but even with an increased military presence, that would likely not be enough to put in place a blockade in the traditional sense, which involves sealing a country’s coastline completely and would effectively have been a declaration of war.
Why has the threatened blockade pushed up oil prices? The threatened blockade of sanctioned oil tankers drove up the U.S. West Texas Intermediate futures price — a key measure of U.S. oil prices — by about 3%, landing the price around $56.50 per barrel.
The measure had dropped to its lowest level since 2021 on Tuesday, just hours before Trump’s announcement. The dip in prices stemmed from a glut of oil alongside relatively slow global economic growth, which has constricted demand for fossil fuels.
“Everybody and their grandmother is bearish on oil prices,” Denton Cinquegrana, chief oil analyst at the Oil Price Information Service, told ABC News.
The threatened blockade disrupted those price doldrums, at least to a minor degree, some experts said.
Venezuela has exported about 749,000 barrels per day this year, with at least half that oil going to China, according to data from Kpler. That oil output amounts to less than 1% of global supply.
The news caused a “knee-jerk reaction” in oil markets due to heightened uncertainty tied to the U.S.-Venezuela conflict, Christopher Tang, a professor at the UCLA Anderson School of Management who studies supply chains, told ABC News. A continued standoff could push oil prices up to around $65 or $70 per barrel, but they’re unlikely to go much higher, Tang added.
“It’s not going to go up to $100 a barrel,” Tang said.
What could the threatened Venezuelan oil blockade mean for gas prices? A jump in oil prices typically brings about an ensuing uptick in the cost of gasoline at the pump, some experts said, since crude oil makes up the key ingredient in auto fuel.
“The single most important price driver of gasoline is crude oil. As crude oil goes up, we expect gasoline to go up,” Timothy Fitzgerald, a professor of business economics at the University of Tennessee who studies the petroleum industry, told ABC News.
The average price of a gallon of gas stands at about $2.88, which marks a 5% decline from a year earlier, AAA data showed. Gas prices are hovering near their lowest level in four years due in part to the low cost of crude oil.
Federal Reserve Chair Jerome Powell speaks during a press conference following the Federal Open Markets Committee meeting at the Federal Reserve on December 10, 2025 in Washington, DC. (Chip Somodevilla/Getty Images)
(WASHINGTON) — Hiring ticked down in December, defying the Federal Reserve’s effort to boost hiring with a recent series of interest rate cuts, a jobs report on Friday showed. The reading fell short of economists’ expectations.
The U.S. added 50,000 jobs in December, which marked a slight drop from 64,000 jobs added in the previous month.
The unemployment rate dropped to 4.4% in December from 4.6% in November, the Bureau of Labor Statistics (BLS) said. Unemployment remains low by historical standards but had ticked up from previous lows.
As in previous months, the healthcare sector accounted for the lion’s share of hiring in December, adding 21,000 jobs, according to the BLS. The food service and social assistance industries also contributed to the hiring figure.
In all, the economy added an average of 49,000 jobs each month in 2025, registering a significant slowdown from 168,000 jobs added per month in 2024, the BLS said.
The fresh data comes two weeks after a blockbuster report on economic growth appeared to rebuke worries about the wider economy prompted by the hiring cooldown.
The U.S. economy grew at a robust annualized rate of 4.3% in the third quarter in the government’s initial estimate, marking an acceleration from 3.8% growth recorded in the previous quarter, the U.S. Commerce Department said in December.
A boost in consumer spending helped propel the economic surge, the department added, suggesting that many consumers continued to open their wallets even as their attitudes worsened.
Meanwhile, inflation dropped in November, the most recent month for which data is available. The cooldown ended a monthslong acceleration of price increases and offered some relief for households strained by cost hikes.
Inflation remains well below a 2022 peak but stands nearly a percentage point above the Fed’s target of 2%.
The onset of elevated inflation alongside sluggish hiring has put the Fed in a difficult position.
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.
Starting in September, the Fed cut interest rates at three consecutive meetings, opting to address the flagging labor market. 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.
Futures markets expect two quarter-point interest rate cuts this year, forecasting the first in April and a second in the fall, according to CME FedWatch Tool, a measure of market sentiment.
After the Fed’s most recent rate cut in December, Fed Chair Jerome Powell suggested the central bank may be cautious about further rate reductions.
“We’re well positioned to wait and see how the economy evolves,” Powell said.
(NEW YORK) — The stock market surged to record highs in 2025, hurtling past tariffs, a government shutdown and fears of a bubble in artificial intelligence.
The S&P 500 — the index that most people’s 401(k)s track — climbed about 17% this year, as of Dec. 23. That performance marks a slight slowdown from two consecutive years of more than 20% growth, but the latest uptick extends a run of gangbusters returns.
The yearslong bull market presents a stark choice for investors as the calendar turns to 2026: Flee from ever-higher stock prices or trust that the good times will continue to roll.
Earlier this month, investment bank Morgan Stanley summed up its market forecast with a single question: “Can the bull market endure?”
Analysts attributed the rise of share prices this year to overlapping trends: Resilient corporate earnings, a series of interest-rate cuts meant to boost hiring and near-inexhaustible enthusiasm for artificial intelligence.
Tariffs, which threatened to derail markets in the spring, eased into an afterthought over the latter half of the year.
A day after tariffs were announced on April 2, major stock indexes shed about $3.1 trillion in value. The selloff amounted to the biggest one-day decline in markets since the onset of the COVID-19 pandemic. Days later, a major swathe of the tariffs were suspended, sending the market to one of its largest ever single-day increases.
“While tariffs remain a source of uncertainty, markets are pricing in limited disruption,” JPMorgan Wealth Management said in an investor note last month.
Even as markets proved resilient, the gains this year remained concentrated in a handful of tech giants, known as the magnificent seven: Alphabet, Amazon, Apple, Meta, Microsoft, Tesla and Nvidia. In September, worries over AI threw cold water on those stocks, causing their prices to waver.
In November, blockbuster earnings from chip giant Nvidia helped rebuke AI fears and shake markets out of the doldrums. Nvidia recorded $57 billion in sales over a three-month span, the company said, setting a quarterly sales record and demonstrating near-bottomless demand for the semiconductors at the heart of AI.
Nvidia, the world’s largest company by market capitalization, soared 40% this year, as of Dec. 23.
Still, some analysts have continued to voice concern about the market’s dependence on AI, as tech firms face increased pressure to turn massive capital investment into profits.
“Equity markets may remain exuberant but face rising risks,” investment giant Vanguard said in December, citing AI as a threat to growth.
Other risks abound, some analysts said. Key measures of the U.S. economy have shown mixed results, making the path forward uncertain. Hiring slowed sharply this year, while inflation remained about a percentage point higher than the Fed’s 2% goal. Economic growth withstood headwinds from tariffs and elevated interest rates, but consumer sentiment sputtered.
Ultimately, Vanguard said its baseline expectation remains optimistic, forecasting overall stock returns next year as high as 8%.
Some analysts predicted even better performance in 2026. JPMorgan Wealth Management predicted stock gains next year between 13% and 15%. BNY Wealth estimated the S&P 500 would end 2026 as high as $7,600, which would amount to about a 10% jump from where the index stood on Dec. 23. Morgan Stanley also forecasted an increase in 2026 of 10%.
In response to its own question about whether the bull market could endure, Morgan Stanley answered with little doubt, saying the odds of a recession next year are “extraordinarily low” and the upswing in stocks “still has room to run.”
