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.
(NEW YORK) — Blockbuster earnings from chip giant Nvidia this week appeared to rebuke concerns about an artificial-intelligence bubble, briefly ending a days-long slump in the stock market.
“It’s fair to say that Nvidia’s results have completely changed the market mood and pushed out any bubble fears for another day,” said Jim Reid, a research strategist at Deutsche Bank, in a memo to clients early Thursday morning, just hours after the earnings.
But the market went on to offer little reassurance. Shares of Nvidia fell almost 3% in the first post-earnings trading session. The major stock indexes also dropped, underscoring the importance of the technology for Wall Street and the overall economy, which have both come to rely on massive AI spending to propel growth.
Nvidia recorded $57 billion in sales over three months ending in October, the company said on Wednesday, setting a quarterly sales record and demonstrating near-bottomless demand for the semiconductors at the heart of AI.
Still, critics say such appetite for the building blocks of AI has far outpaced the technology’s end uses and financial returns. AI hasn’t delivered much profit, they argue, despite up-front costs totaling hundreds of billions of dollars spent on data centers and chips.
Proponents strongly disagree, pointing to the rapid adoption of products like ChatGPT and counseling patience as other uses of the technology take hold. To hear them tell it, AI is set to augur a tech transformation like the internet or electricity, meaning the hype will ultimately bear out even if some firms falter along the way.
“There is no question that Nvidia will make a bunch of money,” Gary Marcus, a professor emeritus of psychology and neuroscience at New York University, who specializes in AI, told ABC News. “There are many questions about where the market is headed after this initial burst of enthusiasm.”
For his part, Nvidia CEO Jensen Huang rejected AI-related worries during an earnings call on Wednesday.
“There’s been a lot of talk about an A.I. bubble,” Huang said. “From our vantage point, we see something very different.”
The economy is undergoing a technological sea change that extends beyond generative AI, Huang said, noting the rise of advanced software such as cloud computing as well as AI-driven physical products — all of which increasingly run on Nvidia chips.
“Nvidia corporation is unlike any other accelerator,” Huang added.
AI spending is expected to total $375 billion this year, jumping to about $500 billion by the end of 2026, UBS Global Wealth Management found in August. For reference, the half-trillion to be spent on AI next year would be roughly equivalent to the gross domestic product of Singapore.
The AI boom has helped propel U.S. economic growth. Such spending added a 0.5 percentage point boost to annualized U.S. GDP growth over the first half of 2025, accounting for about one-third of economic activity, Pantheon Macroeconomics said.
But analysts fearful of an AI bubble warn of what they consider immense costs, saying energy needs and chip production have saddled the balance sheets of firms developing and operating AI models. Profits may not come for years, if at all, they warn. OpenAI said it expects to begin generating substantial profits in 2030.
Speaking to reporters earlier this year, OpenAI CEO Sam Altman acknowledged frenzied investor enthusiasm but signaled confidence about the long-term outlook for the industry.
“When bubbles happen, smart people get overexcited about a kernel of truth,” Altman said. “Are we in a phase where investors as a whole are overexcited about A.I.? My opinion is yes. Is A.I. the most important thing to happen in a very long time? My opinion is also yes.”
Tech giants like Amazon and Google retain the capacity to spend without taking on sizable debt, but smaller players require loans, risking credit defaults if the technology fails to deliver on the up-front costs, Marcus said. The potential unpaid loans could strain banks and put pressure on the wider financial system, he added.
“A big question is how much the banks have been propping this up: What will the blast radius be?” Marcus said.
Proponents of AI say such worries are overblown. They point to the popularity of products like AI chatbot ChatGPT, which boasts about 800 million weekly users. Millions of additional users avail themselves of xAI’s Grok, Google’s Gemini and Meta’s MetaAI.
Last year, Apple unveiled AI-fueled tools for its iPhones, Mac and iPad. Some firms are developing a new wave of AI-equipped robots to perform tasks in people’s homes and in workplaces like logistics and warehouses.
“This is the fastest adoption of any technology by consumers by far,” Lynn Wu, a professor of operations, decisions and information at the University of Pennsylvania, told ABC News. “This is a general purpose technology that will be adopted everywhere.”
The profitability of the technology will be made apparent over time as consumers and businesses identify its best uses, Wu added.
“When a general purpose technology — like electricity or the internet — is being adopted, firms and people don’t know how to use it,” Wu said. “We haven’t envisioned how to use this paradigm yet.”
Still, Wu cautioned, an AI bubble likely exists, though it isn’t dangerous. Wu compared the current state of the industry to the internet era before the dot-com bubble, when a host of firms went belly up but the technology reoriented the economy and established corporate giants.
“If you ask me flat out — yes or no — are we in a bubble? The answer is yes,” Wu said. “But the bubble isn’t necessarily a bad bubble.”
Photo of Wall Street (Matteo Colombo/Getty Images)
(NEW YORK) — Stocks slid on Monday morning in the first trading session since President Donald Trump announced a new 15% tariff on most imported goods, intensifying his effort to impose levies that were struck down by the Supreme Court.
The Dow Jones Industrial Average fell 90 points, or 0.1%, while the S&P 500 dropped 0.1%. The tech-heavy Nasdaq declined 0.1%.
Cryptocurrency prices tumbled in early trading on Monday. The price of bitcoin fell nearly 2%, putting it at about $66,075.
Gold prices jumped to their highest level in three weeks as investors sought the safe-heaven asset amid heightened uncertainty.
In a social media post on Monday, Trump reiterated his criticism of the Supreme Court.
The Supreme Court, Trump said, “accidentally and unwittingly gave me, as President of the United States, far more powers and strength than I had prior.”
Trump retains the power to levy a 15% tariff for up to 150 days under the Trade Act of 1974, which allows the president to address trade disparities with other countries.
Hours after the Supreme Court ruling on Friday, Trump said he would sign an executive order enacting a new 10% “global tariff,” invoking authority under Section 122. On Saturday, Trump escalated the tariff to 15%.
This is a developing story. Please check back for updates.
An ATACM long-range missile is fired towards Iran from an undisclosed location, Feb. 28, 2026. (U.S. Central Command)
(NEW YORK) — Stocks slid on Monday morning in the first trading session after the U.S.-Israeli attack on Iran over the weekend.
The Dow Jones Industrial Average fell 280 points, or 0.5%, while the S&P 500 dropped 0.5%. The tech-heavy Nasdaq declined 0.5%.
The strikes early Saturday morning prompted Iranian drone attacks and missile fire targeting U.S. military bases and Gulf countries. Tit-for-tat strikes rapidly widened into a regional war.
Four U.S. service members have been killed in action, U.S. Central Command said on Monday. At least 555 people have been killed in the U.S.-Israeli strikes on Iran, the Iranian Red Crescent Society said.
Oil prices spiked on Monday amid fears of a prolonged disruption of the Strait of Hormuz, a trading route that facilitates the transport of about one-fifth of global oil supply. Iran asserts control over the passage of tankers through the strait.
Brent crude prices soared more than 7%, threatening to push up prices for auto fuel and hike transport costs for other goods.
An array of global stock exchanges suffered marked losses on Monday.
In Europe, the pan-continental STOXX 600 index tumbled 1.6%. Tokyo’s Nikkei 225 index slipped 1.3%, while South Korea’s KOSPI dropped 1%.
Angelo Kourkafas, a senior global strategist for investment strategy at Edward Jones, on Monday acknowledged the volatility in markets but downplayed the long-term risk.
“While the situation remains dynamic, both historical patterns and market fundamentals offer some reassurance,” Kourkafas said in a statement to ABC News. “Geopolitical flare ups can create short term volatility, but recent episodes have produced limited and short lived market impacts.”
The CBOE Volatility Index (VIX), a measure of anticipated market volatility, climbed more than 7% on Monday.
President Donald Trump announced “major combat operations” against Iran on Saturday, with daytime strikes in the joint U.S.-Israel attack targeting military and government sites, officials said.
On Sunday, Iranian state television confirmed that Ayatollah Ali Khamenei was among those killed by airstrikes in Tehran on Saturday.
Iran is responding to the U.S.-Israeli operation with missile and drone attacks targeting Israel, regional U.S. bases and Gulf nations.
Israel is also intensifying its long-running strike campaign in Lebanon following fresh attacks by the Iranian-aligned Hezbollah militia.
In remarks on Monday, Iranian and American officials signaled expectations of an extended conflict.
The secretary of Iran’s Supreme National Security Council, Ali Larijani, said that Iran is prepared for a long war.
“Iran, unlike the United States, has prepared itself for a long war,” Larijani wrote in a post on X on Monday. He added that Iranian armed forces “have not engaged in any attacks except in defense.”
Gen. Dan Caine, the chairman of the Joint Chiefs of Staff, did not specify a timeline, but said, “This is not a single overnight operation. The military objectives … will take some time to achieve.”
