NEW YORK (AP) — Wall Street continued its upward trajectory on Monday, setting new records despite initial concerns about a feud between the White House and the Federal Reserve. This conflict, experts warn, could lead to higher inflation in the future.
The S&P 500 and the Dow Jones Industrial Average both reached new highs, with the S&P 500 gaining 0.2% and the Dow adding 0.2%. The Nasdaq composite also saw a 0.3% increase.
Despite lingering market nervousness, certain factors helped drive the stock market higher. Walmart’s stock rose by 3% after it was announced that it would join the Nasdaq 100 index. Additionally, Google revealed plans to expand its shopping features by partnering with Walmart and other major retailers, leading to a 1% increase in Alphabet’s market value, surpassing $4 trillion.
However, not all stocks fared well, with credit card companies experiencing losses after President Trump’s threats to impose a 10% cap on credit card interest rates for a year. Synchrony Financial, Capital One Financial, and American Express all saw declines as a result.
The most significant development in the financial markets was a move involving the Federal Reserve and the U.S. Department of Justice. Fed Chair Jerome Powell stated that the DOJ had subpoenaed the Fed and threatened criminal charges over his testimony about renovations at its headquarters. Powell emphasized that these actions were a consequence of the Fed’s independent decision-making on interest rates, rather than following the President’s preferences.
The Fed’s independence has been a point of contention with President Trump, who has advocated for lower interest rates to stimulate the economy. Despite Trump’s criticisms, the Fed has maintained its autonomy in setting monetary policy.
In response to concerns about the Fed’s independence, the bond market saw fluctuations in the yield on the 10-year Treasury. The value of the U.S. dollar also declined against other currencies.
Analysts believe that the market may have shrugged off these concerns due to potential checks on the White House’s influence over the Fed. Congressional approval of Fed nominees and statements from lawmakers, such as Sen. Thom Tillis, indicate a commitment to preserving the Fed’s independence.
As the financial markets navigate these uncertainties, Abercrombie & Fitch and other retailers faced challenges in meeting profit expectations, leading to stock price declines. Despite these setbacks, major stock indexes rose, with the S&P 500 reaching 6,977.27, the Dow Jones Industrial Average at 49,590.20, and the Nasdaq composite at 23,733.90.
Overall, the financial landscape remains dynamic, with global markets experiencing mixed results. While challenges persist, investors are cautiously optimistic about the future.
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