Dow futures exhibit a muted response as the week commences. In conjunction with an upcoming Federal Reserve interest rate announcement and a series of corporate earnings reports this week, the market is closely monitoring a potential tariff threat from President Donald Trump and the ramifications of protests occurring in Minneapolis. In light of these circumstances, gold reaches a new record high.

Dow futures remained just under the flatline on Monday as investors prepared for a week filled with significant events, including a Federal Reserve interest rate decision and a multitude of corporate earnings reports. By 03:00, the Dow futures contract remained stable, having decreased by 4 points, or 0.1%, and subsequently fell by 30 points, or 0.1%. The primary indices experienced a varied finish on Friday, yet all three—the blue-chip, the benchmark S&P 500, and the tech-heavy—registered declines for the week. The previous session was impacted by a pessimistic forecast from a chipmaker, which counts among its supporters the AI-favored Nvidia and the U.S. government. Analysts are keenly observing whether companies exposed to AI, such as Intel, will ultimately convert their substantial investments in this emerging technology into significant financial gains. Nevertheless, optimism persisted that geopolitical tensions, which disrupted equities over the course of the week, were beginning to subside. Traders were evaluating data indicating that the overall condition of the U.S. economy remains robust, primarily propelled by high-income households and corporations.

Attention now shifts to the forthcoming two-day policy meeting of the Fed this week, which will conclude with a new interest rate decision by the central bank on Wednesday. Policymakers are generally expected to maintain rates within a range of 3.5% to 3.75%, after a series of reductions implemented late last year aimed at supporting a decelerating labor market. In light of President Trump’s persistent advocacy for substantial rate cuts, analysts have highlighted robust economic growth, low unemployment levels, and elevated equity markets as justifications for the Federal Reserve potentially maintaining its current stance this month. The ongoing conflict between Trump and Fed Chair Jerome Powell has intensified worries regarding the Federal Reserve’s autonomy from political influence, drawing significant attention. Earlier this month, Powell stated that the Justice Department had initiated a criminal investigation into him—a development the seasoned Fed leader characterized as politically motivated. Powell is set to resign from his position at the Federal Reserve in May, though it remains uncertain whether he will choose to continue serving as a member of its rate-setting committee. Trump has suggested that he might have narrowed his options to a single candidate to succeed Powell. Prediction markets are increasingly favoring BlackRock executive Rick Rider as the leading choice, outpacing former Fed Governor Kevin Warsh. “Analysts at ING noted that the emphasis will be on President Trump’s impending nomination for the new Fed Chair, the forthcoming data, and the ability of that individual to align the rest of the committee towards additional cuts.”

As one tariff threat diminishes, another emerges: Such is the landscape during the initial days of Trump’s second year following his return to the White House. Following what appears to be a retreat from his assertion regarding imposing punitive tariffs on various European nations contingent upon the U.S. acquiring Greenland, Trump indicated over the weekend that he would impose a 100% duty on Canada should the northern neighbor engage in a trade agreement with China. Trump cautioned on social media that Prime Minister Mark Carney, who recently traveled to China to engage in trade discussions and advocated for smaller nations to confront economic coercion by global superpowers during a speech in Davos last week, might jeopardize Canada by forging a new agreement with Beijing. Trump asserted that “China will eat Canada alive, completely devour it, including the destruction of their businesses, social fabric, and general way of life,” further stating that “all Canadian goods and products coming into the U.S.A.” would encounter a 100% import tax if an accord is reached. Carney stated that Canada has “no intention” of pursuing a free trade agreement with China. He stated that Ottawa honors its obligations under a distinct agreement with the U.S. and Mexico, and would notify both parties of such an arrangement prior to advancing it. Analysts at Vital Knowledge noted that while it is unlikely investors need to be overly concerned about the potential implementation of Trump’s 100% tariff on Canada, the ongoing and impulsive nature of these threats is progressively eroding market sentiment.

The prospect of a new U.S. government shutdown has resurfaced following yet another fatal incident in Minneapolis, where demonstrators have engaged in confrontations with federal immigration authorities. Reports indicate that numerous senators within the opposition Democratic Party were inclined to prevent a shutdown after experiencing a historic 43-day closure the previous year. However, the recent shooting of an individual in Minneapolis by a U.S. Border Patrol officer prompted them to adopt a more resolute stance. A number of senators are currently expressing their unwillingness to endorse any financial allocations for the department responsible for U.S. Border Patrol and Immigration and Customs Enforcement, commonly referred to as ICE. Democrats have advocated for increased scrutiny regarding the methods employed by both of these agencies, which have been pivotal in the recent protests occurring in Minneapolis. Trump’s Republicans maintain a majority in the Senate; however, they lack sufficient seats to advance most legislation without securing at least some support from Democrats.

Gold surged past the $5,100 an ounce level on Monday, extending a significant rally from last week as investors flocked to the safe-haven asset in response to an uncertain geopolitical landscape. The yellow metal experienced an increase exceeding 8% last week, as prices consistently surpassed historical highs. The asset has experienced an increase of nearly 17% this year, influenced by a confluence of geopolitical risks, anticipations of a more accommodative U.S. monetary policy in 2026, and persistent demand from central banks.