Markets Brush Off Fed Jitters, CPI Looms 13/01/2026

HOT stories for today

Market wrap:

• U.S. equities extended their rally on Monday, with the S&P 500 and the Dow Jones Industrial Average closing at record highs as investors looked past news of a Justice Department criminal investigation involving Federal Reserve Chair Jerome Powell. The small-cap Russell 2000 also notched a fresh all-time high. Powell, whose term expires in May, said the probe represents another effort by President Donald Trump to exert pressure on the central bank’s policy decisions. Markets have largely shrugged off the president’s repeated criticism of the Fed, which cut its benchmark interest rate three times late last year in an effort to support growth while meeting its dual mandate. 
• Bank stocks lagged after Trump separately called for a 10% cap on credit card interest rates for 1 year. Later Monday, the president also warned that any country conducting business with Iran would face a 25% U.S. tariff. In Asia, Japan’s Nikkei 225 surged more than 3% amid speculation the ruling party may move toward a snap election, while European equities were set to open broadly higher with geopolitical risks still in focus. Investors are also awaiting Tuesday’s U.S. consumer price index report, which is expected to provide clearer insight into inflation trends following distortions tied to last autumn’s prolonged government shutdown. Economists forecast prices rose 2.7% in the year through December.

Stocks Set Records as Fed Pressure Fails to Rattle Markets

• The S&P 500 and Dow Jones Industrial Average closed at all-time highs after an early dip tied to renewed scrutiny of Fed Chair Jerome Powell, who said a Justice Department threat of criminal charges linked to his congressional testimony was “unprecedented.” The episode briefly revived talk of a “sell America” trade in the dollar and long-dated bonds. Equities found support in expectations for further rate cuts later this year, particularly on the view that a Trump-appointed Fed chair would favor looser policy.
• Andrew Slimmon of Morgan Stanley Investment Management said the rally remains fundamentally driven and could extend into 2026, consistent with a healthy—if late-stage—bull market. Bond-market stress proved short-lived, with Treasury yields paring gains after strong demand at auctions of 3- and 10-year notes. Equity investors leaned into a familiar playbook. “We’re firmly in the buy-the-dip camp,” said Jeffrey Schulze of ClearBridge Investments, while warning that high valuations leave room for a pullback. Strategists at JPMorgan said the flare-up briefly rekindled “sell America” positioning, though others described it as hedging rather than an exit. For now, investors appear willing to keep buying dips as long as markets remain orderly.

Stocks on the move:

• Bank stocks: The sector fell broadly after President Donald Trump called for a one-year cap on credit-card interest rates at 10%. Capital One (COF) slid 6%, Synchrony Financial (SYF) tumbled 8% and Citigroup (C) dropped 3%. Bank of America (BAC), Wells Fargo (WFC) and JPMorgan Chase (JPM) were down more than 1%. Buy-now-pay-later provider Affirm (AFRM) reversed earlier gains and fell more than 6%.
• Duolingo (DUOL): Shares fell about 8% after CFO Matt Skaruppa said he will step down effective Feb. 23. The company also reported roughly 30% growth in fourth-quarter daily active users, slightly above FactSet estimates.
• Beam Therapeutics (BEAM): Shares surged 22% after the company said it reached alignment with the U.S. Food and Drug Administration, potentially clearing a path toward accelerated approval for its lead genetic-disease program and liver-targeting therapy BEAM-302.
• Vistra (VST): Shares rose more than 3% after the company announced a private offering of 5- and 10-year senior secured notes to help fund its Cogentrix Energy acquisition. BMO Capital raised its price target to $244 from $230 and reiterated an outperform rating.

Watchlist: DUOL, JPM, VST, NVO, INTC, NVDA, TSLA, GOOGL, DAL

Key Economic Events Today:

EST time

08:30 am: USD CPI, Core CPI
10:00 am: USD New Home Sales
10:00 am: USD FOMC Member Musalem Speaks
02:00 pm: USD Federal Budget Balance


Earnings

BMO ( Before Market Open): JP Morgan Chase (JPM), The Bank of New York (BK), Delta Airlines (DAL)
AMC (After Market Close): Phoenix Education (PXED)? Park Aerospace (PKE)



The TEFS Analyst team wishes you a successful day!