Markets Recover From Lows but Fed Independence Concerns Temper Gains – US Market Wrap
US stocks and bonds rebounded from their session lows, though caution lingered after the Trump administration intensified criticism of the Federal Reserve, stoking worries about the central bank’s independence.
The S&P 500 reversed earlier losses to set a fresh record, but anxiety over political interference in monetary policy restrained broader enthusiasm. Shares of Capital One, American Express, and JPMorgan slid after President Donald Trump urged credit-card issuers to cap interest rates at 10% for a year. Alphabet hovered near the $4 trillion valuation mark.
The independence of the Federal Reserve is widely viewed as a cornerstone of financial markets, and any threat to that perception risks weighing on investor confidence. While concerns around independence are expected to remain a theme in 2026, markets showed signs of stabilization as investors assessed the likelihood and impact of policy escalation.
Over the past week, investors have largely looked past political tensions, focusing instead on signs of economic resilience. Stronger productivity data, solid semiconductor demand, rising shipping rates, and gains in both industrial output and services activity have helped reinforce bullish sentiment.
The S&P 500 edged up to around 6,980, while the KBW Bank Index fell nearly 1%. Most megacap stocks advanced. Alphabet’s Google confirmed it has entered a multiyear agreement with Apple to support the iPhone maker’s artificial-intelligence capabilities.
