NEW YORK, Jan 12, 2026, 10:26 EST — Regular session
- Dow-linked DIA dipped roughly 0.5% in morning action, weighed down by financial stocks hitting the blue-chip index.
- Trump’s plan to cap credit-card rates at 10% and a fresh battle over Fed independence rattled investors
- Traders are focused on Tuesday’s U.S. CPI report alongside the initial batch of big-bank earnings for the next signal
The SPDR Dow Jones Industrial Average ETF Trust (DIA) dropped roughly 0.5% Monday morning, mirroring a pullback in blue-chip shares. The market weighed fresh political pressure on the Federal Reserve alongside the White House’s move to limit credit-card interest rates.
That’s significant for the Dow since it’s price-weighted, so stocks with higher prices have a bigger impact on the index’s movement. MarketWatch calculated that early declines in American Express and Visa alone shaved roughly 155 points off the Dow’s drop.
Fed Chair Jerome Powell said in a video statement late Sunday that the Justice Department served the central bank with grand jury subpoenas connected to his Senate testimony last June regarding plans to renovate Federal Reserve office buildings. Powell dismissed the explanation as a “pretext,” arguing the threat of criminal charges actually centers on the Fed setting rates “based on our best assessment.” Federal Reserve
Goldman Sachs chief economist Jan Hatzius said recent events will heighten concerns about central bank independence but still believes the Fed will base its decisions on incoming data. Goldman now forecasts two 25-basis-point cuts — one each in June and September 2026 — shifting from an earlier view of rate reductions in March and June, Hatzius noted.
The Trump administration has centered its dispute with Powell on “affordability,” also targeting the Fed for a renovation project it deems overpriced. Reuters revealed the White House has threatened to indict Powell over his Congressional remarks about the renovation—a move Powell dismissed as a “pretext” to exert greater control over interest rates. Reuters
U.S. financial stocks dropped after President Donald Trump proposed a one-year cap on credit-card interest rates at 10%, starting Jan. 20, though he did not explain how enforcement would work. J.P. Morgan analyst Vivek Juneja said the cap “would not address the root of the problem.” Meanwhile, Brian Jacobsen of Annex Wealth Management warned lenders might “reduce credit lines” if they can’t price risk properly. Several analysts noted that any such cap would probably need legislation. Reuters
The market is wrestling with two shifting challenges. If the cap proposal stalls in Congress, card issuers might catch a break. But if the Fed ramps up its battle, longer-term yields could stay volatile, which usually hits financial stocks and those with high multiples hard.
Tuesday brings the next key macro read: December’s U.S. Consumer Price Index, arriving at 8:30 a.m. ET. As the government’s primary inflation measure, the CPI often shifts forecasts on the timing and scale of Fed rate cuts.
Earnings are about to hit for the same group dragging on the Dow. JPMorgan Chase will release quarterly results before the open on Tuesday. Other big banks and Dow components follow throughout the week, per MarketBeat’s earnings calendar.
Investors are eyeing the Fed’s upcoming policy meeting set for Jan. 27-28. Officials will provide fresh guidance on interest rates and the economic outlook.
Tuesday’s CPI print is the immediate trigger for DIA and the Dow — it arrives just hours ahead of the initial big-bank earnings and might shape the week’s market mood.
