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Europe midday: Shares in cautious mood as Trump goes after Powell

Mon 12 January 2026 11:24 | A A A

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(Sharecast News) - European shares were lower on Monday as the situation in Iran and a criminal probe into Federal Reserve chief Jerome Powell perceived as a threat to the central bank's independence, hit sentiment.

The pan-regional Stoxx 600 index was down 0.04% at 609 points at 0811 GMT with all major markets muted.

"Global markets opened on the back foot this morning ... softer European markets and US futures pointing to a muted Wall Street open later today as investors grapple with fresh political turbulence and rising geopolitical risk," said Matt Britzman, senior equity analyst at Hargreaves Lansdown.

"Sentiment has been shaken by news of a criminal probe into Fed Chair Jerome Powell and his claims of political pressure from the Trump administration, while unrest in Iran and talk of possible US intervention add another layer of concern."

Widespread protests across Iran were met with a violent crackdown by the Iranian authorities, leaving almost 500 people dead, according to human rights groups.

Iran said diplomatic channels with the US remained open after Trump said he was looking at military action against the Islamic regime.

"We're looking at it very seriously," he said. "The military is looking at it, and we're looking at some very strong options. We'll make a determination," he told reporters on Sunday.

Meanwhile, the dollar fell as the long-running row between Trump and Powell escalated on Sunday when the Department of Justice opened a criminal investigation into the central banker, sending the dollar lower.

Powell said prosecutors had launched a criminal investigation into the $2.5bn renovation of the Federal Reserve's headquarters, and into his testimony about the project to the Senate banking committee in June last year.

"This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions, or whether instead monetary policy will be directed by political pressure or intimidation," Powell said in a video message.

In equity news, shares in BE Semiconductor surged as the Dutch company said orders soared 43% in the final quarter of 2025 on higher demand from data centres.

Shares in Heineken fell after the troubled brewer said chief executive Dolf van den Brink would be stepping down in May.

Barclays fell as Trump said he wanted a cap on credit card interest rates.

Reporting by Frank Prenesti for Sharecast.com

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