S&P 500 – 6,963.74 (-0.19%)

Dow Jones – 49,191.99 (-0.80%)

NASDAQ – 23,709.87 (-0.10%)

• Markets Pull Back from Records: Major U.S. stock indexes retreated Tuesday after the S&P 500 and Dow Jones Industrial Average set fresh highs, as investors digested an in-line inflation report and the official start of earnings season led by major banks.
• Powell Investigation Sparks Political Backlash: Bipartisan opposition is building on Capitol Hill to the Justice Department’s investigation into Fed Chair Jerome Powell, with several Republicans warning the probe threatens central bank independence and could complicate President Trump’s efforts to reshape Fed leadership.
• Inflation Data Reinforces Fed Pause Narrative: A cooler-than-expected December core inflation reading boosted confidence that price pressures are easing, strengthening expectations that the Federal Reserve will keep interest rates on hold in the near term.
• Treasurys Rally, Dollar Softens: Short-term U.S. Treasurys rose on the inflation data, pushing the 2-year yield down to around 3.53%, though gains did not extend to longer maturities. The dollar weakened slightly, while gold held steady near $4,600 an ounce.
• Oil and Metals Surge on Geopolitics and Demand: Crude oil prices jumped after President Trump signaled support for Iranian protesters and canceled meetings with Iranian officials. Mining stocks surged as silver spiked more than 8% to fresh new highs, gold found support from Fed uncertainty, and copper climbed on rising data-center-driven industrial demand.
• Tech’s AI Arms Race Accelerates: Apple’s decision to power Siri with Google’s Gemini models highlighted Google’s growing dominance in artificial intelligence while preserving Apple’s privacy-first strategy. Alphabet also joined the exclusive $4 trillion market-cap club as its stock hit record highs.
• Retail and Consumer Stocks Diverge: Abercrombie & Fitch plunged after trimming its holiday guidance, while American Eagle fell despite raising its fourth-quarter profit outlook. Walmart rose after announcing a Gemini-powered shopping partnership with Alphabet and news of its addition to the Nasdaq-100.
• Crypto Holds Firm Ahead of Policy Action: Bitcoin edged higher and held above $90,000, as investors looked ahead to a key Senate Banking Committee markup on comprehensive digital asset market structure legislation.
• Semiconductors in Focus: Intel climbed after a KeyBanc upgrade, with analysts citing strong hyperscaler demand and sold-out server CPUs for 2026, while Arm fell following a downgrade tied to weaker smartphone shipment expectations. Palantir advanced on an upgrade pointing to accelerating enterprise and government demand.
• Earnings Drive Big Stock Moves: Delta Air Lines slid 5% despite beating earnings expectations after issuing softer full-year profit guidance, while JPMorgan reported results that capped a record year but reflected a hit from its Apple Card acquisition.
• Healthcare and Consumer Staples Strength: The FDA moved to remove suicide-risk warnings from GLP-1 weight-loss drugs after finding no evidence of increased risk. Cardinal Health surged after raising its full-year outlook, while Costco earned recognition as a top consumer staples dividend stock.
• Corporate Outlook Updates: Moderna guided toward the high end of its 2025 sales forecast, Chipotle reaffirmed expectations for declining same-store sales, and Snowflake slipped after a valuation-driven downgrade from Barclays.
• Payments Sector Faces Policy Uncertainty: A proposal to cap credit-card interest rates at 10% for one year injected volatility into payment stocks, even as JPMorgan raised its price target on American Express while maintaining a neutral stance.

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“The path of policy is uncertain, and risks remain.” – Jerome Powell

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Notable Stocks

• Nvidia (NVDA)
• Intel (INTC)
• Chipotle (CMG)
• Apple (AAPL)
• Walmart (WMT)

Weekly Notables

Republican Opposition Intensifies Over Powell Investigation

Opposition on Capitol Hill is mounting against the Justice Department’s criminal investigation into Federal Reserve Chair Jerome Powell, with resistance now extending across party lines and threatening to complicate President Trump’s plans for the central bank. Powell disclosed Sunday that the Justice Department has opened a criminal probe into his handling of renovations at the Federal Reserve’s headquarters and his related testimony to Congress. Powell characterized the investigation as an attempt to intimidate him for moving too slowly on interest rate cuts favored by President Trump.

December Core Inflation Comes in Cooler Than Expected

Core U.S. consumer inflation eased more than anticipated in December, bolstering hopes that price pressures are continuing to cool as the Federal Reserve weighs its next policy steps. Excluding food and energy, the consumer price index rose 0.2% month over month and 2.6% year over year, according to the Bureau of Labor Statistics. Both readings were 0.1 percentage point below economists’ expectations. Core inflation is closely watched by Fed officials as a better indicator of underlying price trends. Headline inflation was firmer but in line with forecasts, rising 0.3% on the month and pushing the annual all-items rate to 2.7%. While inflation is moving closer to the Fed’s 2% target, it remains above desired levels.

Earnings Spotlight: Wells Fargo (WFC)

Wells Fargo (WFC) will be reporting its earnings today. Wall Street analysts expect the company to report earnings per share of $1.66, representing a 16% increase year-over-year. However, revenues are expected to decrease by 30% from the year-ago quarter to $21.65 billion, according to data from the TipRanks Forecast page.

What's Ahead

Earnings to look forward to this week include Bank of America, Wells Fargo, and Citigroup. With bank shares near record highs, expectations heading into earnings remain elevated.

Health-care stocks may also draw attention this week during the 44th annual J.P. Morgan Healthcare Conference which runs from Monday to Thursday.

Wednesday (Jan. 14): PPI, Current Account Balance, EIA Crude Oil, Existing Home Sales, MBA Mortgage Applications Index, New Home Sales, Retail Sales. Earnings from Bank of America Corp. (BAC), Bitmine Immersion Technologies Inc. (BMNR), Citigroup Inc. (C), H. B. Fuller Company (FUL), Home BancShares Inc. (HOMB), Infosys Ltd. (INFY), Wells Fargo & Co. (WFC).

Thursday (Jan. 15): Continuing Claims, EIA Natural Gas Inventories, Empire State Manufacturing, Export Price, Import Prices, Initial Claims, Net Long-Term TIC Flows, Philadelphia Fed Index. Earnings from. Earnings from BlackRock Inc. (BLK), First Horizon Corp. (FHN), Goldman Sachs Group Inc. (GS), J.G. Hunt Transport Services Inc. (JBHT), Morgan Stanley (MS).

Friday (Jan. 16): Capacity Utilization, Industrial Production, NAHB Housing Market Index. Earnings from M&T Bank Corp. (MTB), PNC Financial Services Group Inc. (PNC), State Street Corp. (STT), Regions Financial Corp. (RF), Wipro Ltd. (WIT).