US stocks fell on Tuesday as milder inflation data hinted at Fed easing, with JPMorgan kicking off earnings season with disappointing results. The Dow dropped 0.8%, the S&P 500 lost 0.2%, and the Nasdaq fell 0.1%.
JPMorgan reported an earnings miss due to a $2.2 billion hit from the Apple Card deal, leading a rush of big bank results. Shares fell over 4%, with Bank of America, Citigroup, and Morgan Stanley set to report soon.
Inflation remained steady in December, with the annual rate at 2.7% and core consumer prices rising 0.2% over the month. The Fed’s rate-setting decisions will be influenced by this data, especially after a cooling labor market report for December.
Global central bankers rushed to condemn a DOJ investigation of Fed Chair Jerome Powell, seen as a threat to Fed autonomy. Powell characterized the probe as political pressure from Trump, escalating tensions between the Fed and the administration.
Trump visited a Ford plant in Michigan to promote US manufacturing and economic policies. The state is crucial for the upcoming election, making the visit significant for gauging voter sentiment.
Oil prices hit $65 for the first time since November, driven by geopolitical tensions in Iran and Venezuela. Rising oil prices add to existing market uncertainty, threatening the US trade truce with China and global oil flows.
Gasoline prices fell for a seventh week, staying below last year’s levels. However, a rise in oil prices could reverse this trend, with Brent crude crossing $65 and WTI above $60.50.
Caterpillar’s market cap hit $300 billion due to demand for AI infrastructure. The company’s power generation machinery saw a sales jump, with expectations high for upcoming earnings reports.
Microsoft pledged to manage electricity costs near its data centers, ensuring the local community is not adversely affected. Trump’s threat of tariffs on countries dealing with Iran adds to geopolitical risks impacting markets.
Read more at Yahoo Finance: Dow, S&P 500, Nasdaq slide as inflation eases, JPMorgan sinks with more bank earnings ahead