[New York Stock Market Briefing] Rises across the board despite Trump–Powell clash… Dow, S&P 500 hit record highs

The three major U.S. stock indexes closed slightly higher. Reports also circulated that the Trump administration has launched a criminal probe that could lead to charges against Jerome Powell, chair of the U.S. central bank (Fed).

On the 12th (local time), at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average rose 86.13 points (0.17%) from the previous session to close at 49,590.2. The Standard & Poor’s (S&P) 500 added 10.99 points (0.16%) to 6,977.27, while the Nasdaq gained 62.56 points (0.26%) to finish at 23,733.9.

By sector, all groups advanced except financials and energy. Consumer staples climbed more than 1%. The S&P 500 and the Dow extended their streak of record closing highs.

Stocks reacted sensitively as the Trump administration initiated an investigation that could result in criminal charges targeting Powell. The allegations facing Powell include mismanagement of the Fed headquarters renovation project and perjury before Congress.

In a video released the previous day, Powell said, “On the 9th, I received a grand jury subpoena and threats of criminal prosecution from the Justice Department in connection with my congressional testimony in June last year regarding the renovation of the Fed building,” adding, “This unprecedented action should be viewed in the context of threats and sustained pressure from the administration.”

He continued, “This new threat has nothing to do with my testimony in June last year or the building renovation,” arguing that “these are all pretexts, and the threat of criminal referral is the result of the Federal Reserve setting interest rates based on its own judgment about what best serves the public interest, rather than following the president’s preferences.”

President Donald Trump said of the investigation into Powell, “I know nothing about it,” and White House press secretary Karoline Leavitt also said, “President Trump did not order the investigation.”

However, the market sees President Trump as being behind the criminal probe. Trump has repeatedly disparaged Powell as a “moron” and pressured him for cutting policy rates too slowly.

Still, market participants responded by buying the dip. Gennadiy Goldberg, head of U.S. rates strategy at TD Securities, said, “Right now it feels like a tug-of-war,” adding, “‘Sell America’ may have been today’s concern, but it is not ‘this year’s concern.’” He added that “looking at the bond market, it was closer to a ‘Hedge America’ trade.”

Alphabet rose 1% on the day, topping a $4 trillion market capitalization at the close for the first time in company history—the fourth such milestone globally. After surpassing $3 trillion on Sept. 16 last year, Alphabet cleared $4 trillion in just four months. The move was seen as driven by strong reception for its generative AI model, Gemini.

Among mega-cap tech firms with market capitalizations above $1 trillion, Microsoft, Meta and Amazon fell about 1%. By contrast, Broadcom climbed 2.1% along with Alphabet. Broadcom supplies Alphabet with tensor processing units (TPUs).

Walmart jumped 3% ahead of its inclusion in the Nasdaq 100.

Shares of credit-card companies fell across the board. Visa and Mastercard declined in the 1% range, while American Express fell in the 4% range. Trump’s proposal of a one-year cap on interest rates raised concerns about earnings deterioration.

According to CME’s FedWatch Tool, the federal funds futures market priced in a 95.0% probability of rates being held steady in January.

By Jin Young-gi, Hankyung.com reporter young71@hankyung.com