Markets Shrug Off Powell Probe Amid Geopolitical and Economic Crosscurrents
U.S. stock markets rallied to fresh record highs on Monday, seemingly unfazed by the unprecedented criminal investigation into Federal Reserve Chair Jerome Powell and escalating geopolitical tensions with Iran. The S&P 500 and Dow Jones Industrial Average both closed at all-time highs, underscoring a market focus on near-term economic strength and earnings over institutional turmoil.
The investigation into Powell, which he labeled a politically motivated attack, drew sharp bipartisan condemnation. A statement signed by former Fed chairs and senior officials from both parties called it "an unprecedented attempt to use prosecutorial attacks to undermine [Fed] independence." Former Goldman Sachs CEO Lloyd Blankfein described it as "an attempt at murder-suicide" of U.S. institutions. Despite the gravity of the situation, market strategist Jim Lebenthal noted investors are currently focused on "too many good things," like a healthy economy and strong corporate profits.
Iran Tariffs Threaten to Upend Trade Truce
Adding to the complex backdrop, President Trump announced a 25% tariff on any country doing business with Iran. While not explicitly naming China, the policy directly targets Beijing, Iran's largest trading partner. Analysts warn this could rupture the fragile U.S.-China trade truce and trigger retaliatory measures, introducing a new layer of uncertainty for global markets.
Other significant developments include a massive rally in Venezuelan stocks, with the benchmark index soaring over 130% since the U.S. operation earlier this month, reflecting optimism for economic stabilization. In tech, Apple confirmed a multiyear partnership with Google to use its Gemini AI models to power a smarter Siri. Meanwhile, European defense stocks are surging as investors bet on a sustained "war economy" spending boom across the continent.
Hedge Funds Post Best Year Since 2009
In a sign of the year's robust market activity, the global hedge fund industry recorded its best annual return since the financial crisis, gaining 12.6% in 2025. The performance was driven by strong gains in equity long-short and macro strategies, both of which returned over 17% for the year, according to Hedge Fund Research.
