Earnings Flop. When one of the biggest banks in the nation has a less-than-stellar quarter, it affects the whole market. And even new data showing more muted inflation than expected can’t save the day.

The Dow Jones Industrial Average closed down 398 points, or 0.8%. The S&P 500 fell 0.2%, while the Nasdaq Composite dropped 0.1%. Even the recently red-hot Russell 2000 had a down day, sliding 0.1%.

JPMorgan Chase kicked off fourth-quarter earnings season this morning, but the bank’s profits disappointed—falling 7% from a year earlier. Adjusted earnings, however, did top Wall Street estimates.

My colleague Rebecca Ungarino noted that JPMorgan experienced an unusual quarter thanks to a deal the bank cemented to become the credit card issuer for Apple. The transaction shaved 60 cents off per-share earnings, JPMorgan reported.

A weaker quarter of investment banking fees also dragged on shares of the bank. Additionally, President Donald Trump’s plans for a temporary, 10% limit on credit card rates continued to weigh on financials.

Delta Air Lines also reported earnings this morning and beat expectations, but shares slipped 2.4% after the airline shared disappointing guidance for the year ahead.

It’s very early in earnings season, but JPMorgan’s report turns the potential of a long earnings tailwind into fears of a headwind.

“Elevated price multiples likely mean S&P 500 companies will need to match or beat profit estimates over the coming weeks, and, in aggregate, they’ll probably need to confirm or raise earnings guidance for the current quarter to sustain price appreciation through the earnings season,” writes Anthony Saglimbene, Ameriprise’s chief market strategist.

Earnings continue tomorrow with reports from Bank of America, Citigroup, and Wells Fargo.

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Inflation closed out the year down from the 3% high experienced in September, but it has a way to go before it cools enough to satisfy Federal Reserve officials.

The December consumer price index showed inflation of 2.7%. The core measure, which excludes food and energy, was softer than expected, showing an annual gain of 2.6%, compared with the 2.7% expected by economists, which was also the pace logged in November.

Still, inflation has been above the Fed’s 2% target for more than 4½ years. And that may not shift soon considering that CPI again posted a monthly gain of 0.3% in December, above the rate needed to achieve the target rate. Those figures mean investors shouldn’t expect policymakers to cut interest rates at the Jan. 27-28 meeting of the Federal Open Market Committee.

“The monthly run rate for inflation is still a bit too hot,” writes Jeff Roach, chief economist at LPL Financial. He notes that the CPI would have to consistently show monthly increases of 0.1% and 0.2%, as opposed to the 0.3% recorded in December, before markets and the Fed can conclude that things are back to normal.

Still, the relatively modest pace of inflation, especially compared with the higher numbers seen in the middle of 2025, could give Fed officials room to cut rates in the spring or summer.

“Core inflation came in slightly cooler than expected, offering relief that consumer prices didn’t spike as some had feared,” writes Angelo Kourkafas, a senior global strategist at Edward Jones. “While this likely won’t lead to a January Fed cut, if price pressures remain subdued in the coming months as data noise clears, it could open the door for another rate cut in the spring.”

Tuesday’s CPI data were less noisy than November’s, but the effects of the government shutdown haven’t totally cleared up. The Bureau of Labor Statistics was unable to publish data for October and basically carried prices across from September to November. Additionally, some data were collected on a bimonthly basis, which means the effects of the shutdown confusion haven’t completely unwound.

That’s just another reason Fed officials will likely exercise some additional caution—at least in the short term.

Read my full coverage of today’s CPI data here.

Bank of America, Citigroup, and Wells Fargo announce quarterly results tomorrow.

The BLS releases the producer price index for both October and November. Expectations are for a 2.7% year-over-year rise for November. In September, the PPI increased 2.7%, while the core PPI rose 2.6%.

The Census Bureau reports retail and food-services sales for November. The consensus estimate is for a 0.4% increase month over month, following a flat reading in October. Excluding autos, retail sales are seen rising 0.3%, one-tenth of a percentage point less than previously.

The National Association of Realtors reports existing-home sales for December. Economists forecast a seasonally adjusted annual rate of 4.23 million homes sold, 100,000 more than in November.

The Fed releases the beige book for the first of eight times this year. The report gathers anecdotal information on current economic conditions from the central bank’s 12 regional banks.

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