Shares of Bank of America edged 0.5% higher after reporting a higher profit, as its traders brought in more revenue from a spurt in client activity in the fourth quarter (Q4).
Wells Fargo slipped 2% after missing Q4 revenue estimates, while Citigroup edged lower ahead of its results.
On Monday, JPMorgan executives warned that a proposed ceiling on credit-card interest rates could squeeze consumers and dent profitability across the financial sector.
While Wall Street’s deal desks are expected to benefit from revived dealmaking in the final quarter, investors are also looking for signals on credit quality and consumer sentiment.
Wall Street’s main indexes have stalled this week after the Dow and the S&P 500 touched record highs, with traders awaiting Q4 earnings to see if they meet elevated expectations.
Analysts project S&P 500 companies will deliver average Q4 earnings growth of 8.8% year-on-year, lifting full-year 2025 bottom-line expansion to 13.2%, according to IBES LSEG data.
At 6.47am, Dow E-minis were down 153 points, or 0.31%, S&P 500 E-minis were down 28.25 points, or 0.4% and Nasdaq 100 E-minis were down 153.75 points, or 0.59%.
Producer prices and retail tests loom
After December’s expected consumer-price rise, investors are now watching Wednesday’s producer price and retail sales releases, alongside speeches from Fed voting members John Williams, Anna Paulson, Stephen Miran and Neel Kashkari.
For now, interest rates are widely expected to hold steady through the first half of the year, including at the Fed’s January meeting, as long as inflation and growth remain on track. Traders, however, are still pricing in at least two cuts before year-end, according to LSEG data.
“PPI will hold clues on CPI risks,” said Elias Haddad, global head of markets strategy at Brown Brothers Harriman.
“Progress towards the Fed’s 2% inflation goal is stalling. But upside risks to prices are fading.”
Meanwhile, the Danish and Greenlandic foreign ministers will meet with US vice-president JD Vance at the White House later in the day following weeks of threats by President Donald Trump to take control of Greenland, an autonomous territory of Denmark.
So far, markets have largely overlooked geopolitical risks such as the US toppling Venezuela’s leader, with enthusiasm around artificial intelligence and Q4 results driving US indexes to new peaks.
The stock market’s record rally is also showing early signs of broadening out this year, with S&P 400 midcaps and S&P 600 smallcaps outperforming the largecap S&P 500 so far this year.
Palo Alto Networks and Fortinet fell 3.3% and 2.5%, respectively, before the bell after sources told Reuters that Chinese authorities have told domestic companies to stop using some US and Israeli cybersecurity software due to national security concerns.