By Anietie Anii-Bassey
U.S. stock markets were poised for a modest decline before trading began Tuesday, as investors cautiously assessed the first major corporate earnings reports of the season while awaiting fresh inflation data that could influence the Federal Reserve’s next policy move.
Futures tied to the S&P 500 and the Dow Jones Industrial Average each slipped about 0.1% ahead of the opening bell, while Nasdaq futures fell 0.2%, signaling a tentative start to the day following recent record-setting sessions on Wall Street.
Early corporate earnings produced a mixed reaction. Shares of JPMorgan rose slightly after the bank reported stronger-than-expected revenue and profit, buoyed by solid trading results and continued growth in its consumer banking operations. The performance reinforced the bank’s position as a bellwether for the broader financial sector at the start of earnings season.
Delta Air Lines, however, weighed on sentiment. The airline’s shares dropped about 5% after the company narrowly exceeded fourth-quarter expectations but issued outlook guidance for 2026 that fell short of what investors had hoped for, raising concerns about demand and cost pressures in the aviation industry.
Credit card companies, which had taken heavy losses a day earlier, showed signs of stabilization. Synchrony Financial, Capital One Financial and American Express all posted modest gains of less than 1% in premarket trading.
The sector had been rattled Monday after President Donald Trump said he was considering a one-year cap of 10% on credit card interest rates, a proposal that sparked fears of tighter profit margins across consumer lenders.
Later in the day, investors were set to turn their focus to the Labor Department’s report on consumer inflation for December. Economists expect the data to show that prices rose 2.6% compared with a year earlier, according to consensus estimates. Inflation has remained stubbornly above the Federal Reserve’s long-term target of 2%, complicating expectations for interest rate cuts at the central bank’s upcoming meeting later this month.
The Federal Reserve cut its benchmark interest rate three times toward the end of 2025, a move that helped support equity markets by lowering borrowing costs. While cheaper credit often boosts stock prices, it can also risk reigniting inflation, leaving policymakers caught between supporting growth and keeping price pressures in check.
Market sentiment has also been influenced by growing tension between the White House and the Federal Reserve. Concerns spilled into trading earlier in the week after the Justice Department subpoenaed the Fed and raised the prospect of a criminal indictment related to testimony by Fed Chair Jerome Powell concerning renovations at the central bank’s headquarters.
In a video released Sunday, Powell described the threat as a pretext aimed at undermining the Fed’s independence in setting monetary policy.
President Trump has repeatedly urged the Fed to push interest rates lower to reduce borrowing costs for consumers and businesses. The White House said Monday that Trump did not direct the Justice Department to investigate Powell, but the episode has added an unusual layer of political uncertainty to financial markets.
Overseas, European markets were mixed around midday. Germany’s DAX slipped 0.1%, France’s CAC 40 fell 0.5%, and Britain’s FTSE 100 hovered near flat as investors digested global economic signals.
Asian markets posted broader gains, led by a powerful rally in Japan. Tokyo’s Nikkei 225 surged 3.1% to close at a record 53,549.16, driven by strong advances in technology-related shares. Advantest, a maker of chip-testing equipment, jumped 8.5%, while Tokyo Electron climbed 8.2%. SoftBank Group added 4.3%, further lifting the benchmark.
The U.S. dollar strengthened to 158.90 yen, up from 158.07 yen, hovering near its highest level against the Japanese currency in more than a year. Market participants attributed the yen’s weakness to what has been dubbed the “Takaichi trade,” reflecting expectations tied to Prime Minister Sanae Takaichi, who took office in October.
Takaichi is widely expected to call a snap election to capitalize on strong approval ratings and push for increased government spending, a prospect that has weighed on the yen.
Elsewhere in Asia, Hong Kong’s Hang Seng Index rose 0.9% to 26,848.47. Shares of China-based chip designer GigaDevice Semiconductor soared as much as 54% during their Hong Kong trading debut, drawing strong investor interest. In mainland China, the Shanghai Composite slipped 0.6% to 4,138.76.
South Korea’s Kospi climbed 1.5% to close at a record 4,692.64, extending gains fueled by technology and export-related stocks. In Australia, the S&P/ASX 200 added nearly 0.6% to 8,808.50, while Taiwan’s Taiex rose 0.5%. India’s Sensex moved in the opposite direction, edging down almost 0.3%.
In energy markets, oil prices advanced. U.S. benchmark crude rose $1.17 to $60.67 per barrel, while Brent crude, the international standard, also gained $1.17 to trade at $65.04 per barrel, reflecting continued uncertainty around global supply and demand as markets weigh economic growth prospects.
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