New York, Jan 12, 2026, 08:13 EST — Premarket
- Capital One slips nearly 10% in premarket trading following Trump’s call to cap credit-card interest rates at 10%
- Banks and peer card lenders slip while select “buy now, pay later” firms gain ground
- Traders are focused on bank earnings this week and any updates before Jan. 20
Shares of Capital One Financial dropped roughly 10% in premarket Monday after investors offloaded credit-card and consumer-lending stocks amid fresh chatter about rate caps.
The squeeze landed hard on a business built around spreads. Credit-card interest powers issuer profits, and a 10% cap would plunge well below the industry’s current rates. The bids quickly evaporated.
Synchrony Financial and Bread Financial tumbled between 10% and 11% in early trading. American Express slipped about 4%, while Visa and Mastercard each dropped roughly 2%. On the flip side, alternative lenders gained ground: Affirm rose around 5%, and Block added about 2%, buoyed by speculation that tighter bank credit could push more consumers toward “buy now, pay later” options. Jefferies analysts dismissed the proposal as lacking “executive authority,” labeling it “dead on arrival” in Congress. Meanwhile, a J.P. Morgan note warned that a rate cap might push borrowers into more expensive, non-bank debt. 1
On Friday, Trump proposed capping credit-card interest rates at 10% for one year starting Jan. 20, but didn’t specify how the cap would be enforced. Senator Elizabeth Warren, a Democrat, dismissed the plan as pointless without actual legislation, saying, “Begging credit card companies to play nice is a joke.” Banking trade groups warned that a strict cap could restrict credit access and push borrowers toward less-regulated lenders. 2
Capital One faces a clear headline risk: reduced allowed APRs translate to lower yields on revolving balances, even as costs and losses fluctuate with the economic cycle. The stock has behaved like a policy proxy in the past—and it just did so once more.
Earnings season kicks off amid the debate. JPMorgan reports Tuesday, with Bank of America, Citigroup and Wells Fargo set to follow later in the week. Investors will be focused on how executives discuss card pricing, charge-offs, and any changes in underwriting standards. 3
The broader market provided little support. U.S. stock index futures dipped in early New York trading as investors braced for Tuesday’s U.S. consumer price index report, a crucial indicator for the rate outlook. 4
A cap isn’t set in stone. That’s what’s limiting the selloff. If the White House can’t deliver a legal path forward, or if lawmakers push back, losses for card companies could vanish as fast as they appeared.
Still, if Washington pushes the call into a bill gaining traction, traders are likely to position for downside once more. The challenge isn’t the headline itself. It’s the ripple effects: stricter credit limits, a drop in approvals, and stress hitting the lower tiers of the credit market.
Right now, the market is focused on two key timelines: upcoming bank earnings reports this week and whether the administration or Congress will propose a plan before Jan. 20.
