The Dow Jones Industrial Average fell by 308 points, or 0.6%, at the start of trading Monday morning. The S&P 500 index dropped by 0.3%.
The U.S. dollar also dropped by 0.3%, but 30-year Treasury bonds rose by roughly the same amount. Meanwhile, gold jumped by a new record of 2.5%. Gold hitting a high is usually a sign of anxiety among Wall Street investors.
The drop in stocks and the dollar revived the “sell America” trend that happened last year whenever the Trump administration made a major announcement, such as its initial rollout of tariffs last April.
On Sunday, Powell announced the DOJ had launched a criminal investigation into his Senate testimony about renovations at the Fed headquarters in Washington, D.C. President Donald Trump has expressed concern about the cost overruns estimated to total $2.5 billion, but the president claims the project costs up to $3.1 billion. Powell denied the budget was that high.
Investigators are curious whether Powell may have lied to Congress about the scope of the project.
Jeanine Pirro, the U.S. attorney for the District of Columbia, is leading the investigation into Powell.
Powell cast the administration’s criminal inquiry as an attempt to punish him for his interest rate decisions, which Trump has repeatedly decried.
POWELL DEFENDS HIS RECORD IN VIDEO STATEMENT AFTER DOJ CRIMINAL INQUIRY DROPS
The embattled official also characterized the inquiry as an attack on the Fed’s independence. Trump denied his involvement in the investigation.
Powell’s term as Fed chairman ends in May, after which he will be replaced by Trump’s pick. Trump said last week he has made his decision on Powell’s successor, but he hasn’t announced his selection yet. Sen. Elizabeth Warren (D-MA) is among the federal lawmakers signaling their opposition to any Fed chair candidates nominated by Trump while the DOJ targets Powell.
