Wall Street headed for a quiet day; inflation data keenly awaited

• JPMorgan Chase reported weaker quarterly profits after taking a $2.2 billion hit related to its Apple Card business
• Markets see almost no chance of a Fed rate move in January, with the first cut priced for June followed by a second later in 2026
• President Trump warned of new tariffs on countries trading with Iran, adding geopolitical uncertainty as earnings season accelerates

Market Summary: Wall Street Awaits Inflation Data

Market Overview:

US stock futures edged lower on Tuesday after major indices closed at fresh record highs the previous session. Contracts on the Dow, S&P 500, and Nasdaq all declined modestly as investors paused ahead of key economic data.

Key Economic Data:

December's Consumer Price Index (CPI) report is the focal point, with expectations for:

• Annual inflation: 2.7% (unchanged)
• Monthly increase: 0.3%

The inflation data carries heightened significance following recent jobs data suggesting a cooling labor market.

Federal Reserve Outlook:

Interest rate expectations remain stable, with markets pricing:

• Near-zero probability of a January rate cut
• First rate cut anticipated in June 2026
• Second cut expected later in 2026

Corporate News:

JPMorgan Chase reported weaker quarterly profits, absorbing a $2.2 billion charge related to its Apple Card business. The earnings season is accelerating as major financial institutions begin reporting.

Geopolitical Risks:

President Trump issued warnings about potential new tariffs targeting countries trading with Iran, introducing fresh uncertainty into markets already navigating inflation concerns, monetary policy expectations, and corporate earnings results.

Market Sentiment:

Investors have largely dismissed political noise surrounding the Federal Reserve, maintaining focus on fundamental economic data. The combination of record highs, awaited inflation figures, and geopolitical developments suggests cautious positioning ahead of the CPI release.