US stocks closed at fresh records on Monday, with the Dow Jones Industrial Average rising 0.2% and the S&P 500 gaining 0.2%. The Nasdaq Composite added 0.3%. The indexes had opened lower but turned around by late morning.
The moves came as US prosecutors opened a criminal investigation into Federal Reserve Chair Jerome Powell. In a statement, Powell said the Justice Department has subpoenaed the Fed, threatening criminal charges over his testimony on building renovations. He called the action an escalation of President Trump's campaign to pressure the Fed into cutting interest rates.
"The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President," Powell wrote. He described the concerns cited in the subpoenas as "pretexts."
Other markets showed more effects. Gold and silver surged to records as investors flocked to safer havens. Bonds ticked lower. The US dollar also fell.
In corporate news, bank and other financial services stocks slumped. This followed a warning from Trump to credit card issuers on Sunday. He said lenders will be "in violation of the law" if they don't cap interest rates at 10%. Shares of Capital One slid 7% to lead early trading losses. Citi and JPMorgan also fell.
The week begins as big US banks prepare to kick off earnings season. Investors are also looking ahead to Tuesday's Consumer Price Index reading for December. Markets were overwhelmingly betting on no rate cut from the Fed this month after Friday’s December jobs report showed continued cooling in the labor market.