U.S. stock index futures drop as Fed faces DOJ probe

S&P 500 Futures dropped 0.4% to 6,974.0 points, Nasdaq 100 Futures declined 0.7% to 25,766.75 points, while Dow Jones Futures shed 0.4% to 49,525.0 points

U.S. stock index futures dropped further on Sunday evening amid heightened uncertainty over the central bank’s independence after Chair Jerome Powell said the bank was being threatened with criminal indictment over his testimony on an ongoing renovation of the bank’s headquarters.

Powell alleged that the probe was politically motivated, amid continued pressure from the Donald Trump administration that the bank cut interest rates.

S&P 500 Futures dropped 0.4% to 6,974.0 points, while Nasdaq 100 Futures declined 0.7% to 25,766.75 points by 01:20 GMT. Dow Jones Futures shed 0.4% to 49,525.0 points.

The fourth quarter earnings season begins in earnest this week, while key consumer inflation data for December is also on tap.

Powell in a Sunday evening statement confirmed that the central bank was threatened with legal action by the DOJ over his June 2025 Senate testimony, but alleged that the threat was not actually tied to his testimony or an ongoing renovation of the bank’s Washington D.C. headquarters.

Powell indicated that the threats were likely motivated by the Trump administration’s repeated calls for the bank to lower interest rates sharply.

This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings. This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions—or whether instead monetary policy will be directed by political pressure or intimidation, Powell said.

His comments are the most direct yet in addressing heightened political pressure on the bank to cut rates. Trump had called for at least 2% of rate cuts in the past year, while the bank delivered a total 0.75% of cuts in 2025.

The Fed-White House feud also comes with Powell’s term set to expire in May. Trump said last week he was close to nominating Powell’s successor.