Risk retreats as Powell investigation raises fears on Fed independence

Recent headlines indicate that Trump is intensifying his attacks on the Fed's independence, particularly through the investigation of Fed Chair Jerome Powell. This situation is causing significant market repercussions, reflected in a 0.6% decline in S&P 500 futures, a 0.9% drop in Nasdaq futures, and a 0.5% fall in Dow futures. Despite the ongoing probe, the Fed is expected to continue its operations, but many believe this political drama is unnecessary for the market. Trump's consistent attacks are eroding confidence in the Fed's credibility and independence, negatively impacting the dollar. This week also marks the earnings reports season for major U.S. banks and holds great significance for TSMC's earnings, which serve as a key indicator for chipmakers. Furthermore, geopolitical issues remain a concern, especially with rising threats towards Greenland and Iran, adding to the existing global tension. Overall, a cautious approach is advisable amid these developments.