U.S. stock futures declined Sunday following Federal Reserve Chair Jerome Powell's public accusation that former President Donald Trump attempted to intimidate the Department of Justice over a criminal investigation. The market reaction comes as investors brace for earnings season amid rising political uncertainty.
- SPX futures dropped 0.7%, DJI futures fell 0.6%, and NDX futures declined 0.8%
- US10Y yield rose to 4.82% amid heightened political risk
- Federal Reserve Chair Powell accused former President Trump of pressuring the DOJ
- Earnings season begins shortly, increasing sensitivity to regulatory and political news
- Financials, technology, and consumer sectors face elevated scrutiny
U.S. stock futures tumbled on Sunday, with the S&P 500 futures (SPX) down 0.7%, Dow Jones Industrial Average (DJI) futures falling 0.6%, and Nasdaq-100 (NDX) futures shedding 0.8% after Federal Reserve Chair Jerome Powell testified before Congress. Powell stated that Trump pressured Justice Department officials during his presidency to halt or delay investigations into individuals tied to his administration, including a probe involving financial and campaign-related matters. The remarks marked a dramatic escalation in the ongoing debate over political interference in federal law enforcement. While no specific charges were mentioned, the disclosure has introduced new macroeconomic risk, particularly as markets approach the start of the Q4 earnings season. Investors are now weighing potential regulatory shifts and legal exposure across financials, technology, and consumer sectors—industries heavily scrutinized in recent DOJ inquiries. Bond markets reacted swiftly: the 10-year U.S. Treasury yield (US10Y) rose to 4.82%, reflecting increased concerns about fiscal and political instability. This move contrasts with Friday’s closing highs, when the S&P 500 and Dow both reached record levels, signaling a rapid reversal in investor sentiment. Market participants are now assessing the implications for corporate governance and compliance policies, particularly among firms with deep ties to government contracting or political fundraising. The developments could influence trading volumes and volatility in the coming weeks, especially if further disclosures emerge.