The S&P 500 and Dow Jones Industrial Average reached record closing highs on Monday, demonstrating market resilience amid political uncertainty and mixed sector performance. Investors largely brushed aside concerns about the Justice Department's criminal investigation of Federal Reserve Chair Jerome Powell, focusing instead on strong corporate performance and upcoming earnings reports.

Market Performance Overview

The major indices posted solid gains despite opening lower on news surrounding the Fed Chair investigation:

Trading volume reached 17.29 billion shares on U.S. exchanges, exceeding the 20-day average of 16.40 billion shares. Advancing issues outnumbered decliners by a 1.68-to-1 ratio on the NYSE, while the Nasdaq saw a 1.22-to-1 advancing ratio.

Walmart Leads Consumer Sector Rally

Walmart emerged as a standout performer, climbing 3% and providing significant support to both the S&P 500 and Nasdaq. The retail giant's strong performance comes ahead of its inclusion in the Nasdaq-100 index on January 20, following its recent stock listing transfer from the NYSE to Nasdaq. This index inclusion is expected to attract billions of dollars from passive index funds.

Consumer staples led sector gainers with a 1.4% increase, while technology stocks also posted notable advances. The S&P 500's top performers included:

Financial Sector Under Pressure

Despite the overall market strength, financial stocks faced significant headwinds following Trump's proposal for a one-year cap on credit card interest rates at 10% starting January 20. The financial sector declined 0.8%, leading sector decliners in the S&P 500.

Key financial sector casualties included:

Powell Investigation Impact Minimal

The Justice Department's criminal investigation threat against Fed Chair Powell, focused on comments he made to Congress about a building renovation project, initially caused market concern. Powell characterized the move as a "pretext" to gain influence over interest rates that Trump has pressed to cut since taking office in January 2025.

Peter Cardillo, chief market economist at Spartan Capital Securities, noted that "the news that Powell is being investigated by the Justice Department was basically telegraphed by Trump, and so the market is taking it in stride for now." He added that support from former Fed governors provided additional market comfort.

Earnings Season Anticipation

Investors are positioning ahead of the fourth-quarter earnings season, which begins Tuesday with results from JPMorgan Chase and other major banks. Analysts project strong performance, particularly in technology, with the sector expected to lead S&P 500 earnings growth at 26.5% year-over-year. Overall S&P 500 companies are anticipated to report earnings growth of 8.8% compared to the same quarter last year.

Markets are also awaiting Tuesday's consumer price index report, which could influence Federal Reserve rate cut expectations. Current market pricing suggests at least two more quarter-point cuts before year-end, according to LSEG data.

The S&P 500 index posted a modest gain in its latest trading session, advancing 10.86 points to close at 6,977.14. The benchmark index's performance represents a 0.16% increase, demonstrating steady market momentum.

Market Performance Overview

The S&P 500's closing performance showcased resilient market conditions during the trading session. The index's advance of 10.86 points brought the closing level to 6,977.14, marking a fractional but positive movement for investors.

Index Movement Analysis

The 0.16% gain reflects measured optimism in the equity markets. While the percentage increase appears modest, the consistent upward trajectory indicates underlying market stability. The S&P 500's performance at these elevated levels demonstrates the index's ability to maintain momentum near historical highs.

The closing figure of 6,977.14 represents the unofficial settlement for the trading session, providing investors with a clear benchmark for market performance evaluation.