New York, Jan 12, 2026, 06:01 EST — Premarket
- Dow futures slipped roughly 0.4% before the open as investors zeroed in on the Federal Reserve’s independence.
- Shares in banks and card companies dropped following President Donald Trump’s call to cap credit card interest rates at 10%, effective Jan. 20.
- Traders are focusing on Tuesday’s U.S. inflation data and the kickoff of big-bank earnings.
Dow futures fell roughly 0.4% Monday, signaling a softer start for Wall Street. (Barron’s)
The move came after a new clash between President Donald Trump’s administration and Federal Reserve Chair Jerome Powell. Powell revealed that the Justice Department had served the Fed with grand jury subpoenas and even threatened him with criminal charges over his Senate testimony last June concerning a Fed building renovation. “Those are pretexts,” Powell said in a statement. (Reuters)
Why it matters now: investors have counted on rate cuts later this year to support lofty equity valuations, and any sign the Fed’s independence might be compromised could upend those expectations. In early overseas trading, the dollar weakened while gold soared past $4,600 an ounce, hitting a record as traders moved toward safe havens; S&P 500 futures dropped more than 0.5%. (Reuters)
A separate Washington headline also hit Dow financial heavyweights. Trump proposed a 10% cap on credit card interest rates for one year starting Jan. 20, but didn’t explain how it would be enforced. Bank and lender shares dipped in premarket trading. J.P. Morgan analyst Vivek Juneja cautioned the cap “could push consumers towards more expensive debt,” highlighting non-bank alternatives. (Reuters)
Several Wall Street firms remain skeptical about swift moves, despite highlighting the political risks involved. TD Cowen pointed out that a nationwide cap requires Congressional approval, while Barclays noted the president’s limited power to enforce one alone, recalling past attempts that never took hold. (Reuters)
The Dow wrapped up last week on a high note, climbing 0.48% Friday to close at 49,504.07. The S&P 500 hit a record close, buoyed by chipmakers driving the rally. (Reuters)
Goldman Sachs chief economist Jan Hatzius doesn’t see the Powell clash altering the Fed’s short-term approach. He said the incident might heighten concerns over the central bank’s independence, but he still expects policy choices to hinge on economic data. (Reuters)
The next big hurdle comes Tuesday with the U.S. consumer price index (CPI), a key monthly inflation measure that often shifts rate forecasts sharply, set to drop at 8:30 a.m. ET. (Bureau of Labor Statistics)
Fed chatter returns this week with comments expected from Vice Chair Philip Jefferson and Vice Chair for Supervision Michelle Bowman. Investors will be tuning in for any changes in tone following the weekend’s legal drama. (Federal Reserve)
The Dow is caught in a tug-of-war: banks and card-linked stocks grapple with headline risk from Washington, while a dip in bond yields might ease the strain on rate-sensitive sectors.
This setup could turn fast. If the credit-card cap debate stalls in Congress or the Powell battle loses steam, risk appetite might surge; on the flip side, if inflation heats up, yields could spike and the Dow’s early-year gains might seem overly ambitious.
