DOJ Probe Elevated Market Volatility
Key Points
- The DOJ criminal investigation into Fed Chair Powell had heightened political-risk concerns and prompted safe-haven flows, lifting volatility and pressuring equity futures.
- Early risk-off swings tied to the DOJ probe had pushed volatility and safe-haven demand, but U.S. equities later recovered to modest gains while Asia outperformed and Europe was mixed.
- The ECB published an Economic Bulletin box analyzing food inflation drivers, a read that was cited as supporting euro-area rate premia and influencing EUR/USD (EURUSD) and sovereign yields.
- Senseonics reported preliminary Q4 2025 revenue and issued 2026 revenue guidance while noting a commercialization transition and an FDA IDE, creating near-term event risk for SENS and peers.
Global Market Summary
U.S. equities closed modestly higher after early risk-off swings linked to a DOJ probe of Federal Reserve Chair Jerome Powell; the Nasdaq (^IXIC) rose 0.39% and the Dow (DJIA) gained 0.14% as markets recovered. Europe was mixed, with the DAX (DAX) up 0.57% and the FTSE (UKX) up 0.16% while the CAC (FRA40) slipped 0.04%. Asia led gains, with Shanghai (000001.SS) up 1.09% and Hong Kong (HSI) up 1.44%.
Top Movers
XLP (1.12%) led sectors while financials XLF (-0.76%) lagged. Industrials XLI (0.65%) and technology VGT (0.64%) outperformed. Top stock movers included BEAM (+23.23%), KC (+22.14%) and HYMC (+20.49%), while ATEC (-20.84%), NUVB (-19.71%) and ANF (-18.06%) were the largest decliners.
Macro highlights
A DOJ criminal investigation into Fed Chair Powell heightened political-risk concerns and earlier prompted safe-haven flows and higher volatility, putting pressure on equity futures and complicating the policy outlook. The ECB published an Economic Bulletin box analyzing drivers of food inflation, a read that could support euro-area rate premia and influence EUR/USD (EURUSD) and sovereign yields. Australian Westpac consumer-confidence for January was on the calendar (consensus ~+2.6% versus prior -9%), though no actual print was recorded in the dataset.
News that moved markets
Senseonics (SENS) reported preliminary Q4 2025 revenue of about $14.2 million, provided preliminary full-year 2025 revenue and issued 2026 revenue guidance of $58–$62 million while noting a commercialization transition and an FDA IDE for a pivotal Gemini sensor trial, creating near-term event risk for SENS and peers. Separately, the DOJ's probe of Fed Chair Powell dominated headlines and produced early risk-off trading, lifting volatility and safe-haven demand while prompting modest moves in futures, Treasuries and the dollar. CompoSecure completed a business combination with Husky Technologies and rebranded its corporate entity to GPGI, Inc., and TowneBank completed its merger with Dogwood State Bank. Announced transactions included EnableComp's acquisition of H/ROI, Bascom Arizona Ventures' $53.4 million purchase of a Tucson multifamily property, and ProductPlan's acquisition of Winware.ai.
Upcoming session watchlist
- US Inflation Rate YoY (DEC) , 2.7% vs 2.7% prior, Jan 13, 01:30 PM | Signals near-term inflation trend and informs consumer price growth expectations.
Key Takeaways
- The DOJ probe produced early risk-off trading that lifted volatility and safe-haven demand and prompted modest moves in futures, Treasuries and the dollar.
- U.S. major indices recovered to close modestly higher after early swings; the Nasdaq outperformed while the Dow and select benchmarks posted smaller gains.
- Asia led gains with Shanghai and Hong Kong advancing, while Europe was mixed across the DAX, FTSE and CAC.
- XLP led sectors while XLF lagged; XLI and VGT outperformed and several individual stocks recorded double-digit moves in both directions.
References
- 1. https://www.nasdaq.com/press-release/senseonics-announces-preliminary-unaudited-revenue-fourth-quarter-2025-and-provides
- 2. https://markets.financialcontent.com/stocks/article/marketminute-2026-1-12-s-and-p-500-and-nasdaq-erase-early-losses-amid-shocking-doj-probe-into-fed-chair-jerome-powell
- 3. https://x.com/RapidResponse47/status/2010778803644350643
- 4. https://x.com/RapidResponse47/status/2010705618248544620
- 5. https://x.com/RapidResponse47/status/2010725041026298004
- 6. https://x.com/RapidResponse47/status/2010734789922566389
- 7. https://x.com/Barchart/status/2010807672799670605
- 8. https://x.com/Barchart/status/2010812405568229418
- 9. https://x.com/PeterLBrandt/status/2010700777149620420
- 10. https://www.ecb.europa.eu/home/html/index.en.html
- 11. https://x.com/i3_invest/status/2010758675674411466
- 12. https://x.com/Barchart/status/2010531616175878504
- 13. https://x.com/PeterLBrandt/status/2010717090391732354
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