US futures fall as Fed independence concerns shake market confidence

• The dollar fell to a three-week low while gold hit new record highs as investors sought safe-haven assets amid the Fed-White House tensions
• Markets are awaiting December's consumer price index data due Tuesday, with traders pricing in no rate cut at the Fed's January meeting following steady labor market cooling
• Geopolitical tensions escalated as Trump refused to rule out military action against Iran and revived threats regarding Greenland, adding to risk-off market sentiment

Market Summary: US Futures Decline on Federal Reserve Independence Concerns

Market Performance:

US stock futures retreated Monday morning, with Dow Jones futures down 0.7%, S&P 500 futures falling 0.55%, and Nasdaq 100 leading losses at nearly 0.8%. Markets pulled back from record highs reached last week.

Key Development:

The Department of Justice has subpoenaed the Federal Reserve and launched a criminal investigation into Fed Chair Jerome Powell regarding testimony about building renovation costs. Powell strongly condemned the probe as politically motivated, alleging President Trump is attempting to force rate cuts ahead of November elections. Powell stated: "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."

Market Implications:

The Fed-White House tension rattled investor confidence, triggering safe-haven flows. The dollar fell to a three-week low, while gold surged to new record highs. Traders are pricing in no rate cut at the Fed's January meeting following last week's jobs report showing labor market cooling without economic weakness.

Upcoming Catalysts:

December's Consumer Price Index (CPI) data releases Tuesday, representing a critical inflation gauge for market direction.

Geopolitical Factors:

Additional risk-off sentiment stems from escalating Iranian unrest, with Trump not ruling out military action. Oil prices eased slightly amid supply chain disruption concerns. Washington tightened restrictions on Cuban involvement in Venezuelan oil exports, and Trump renewed tensions with Denmark over Greenland acquisition proposals.

The combination of central bank independence concerns and geopolitical uncertainty has created a cautious market environment ahead of key economic data releases.