NEW YORK, Jan 14, 2026, 13:41 EST — Market open for regular trading.
- Dow drops for a second day, dragged down by falling bank stocks and widening tech sector declines.
- New U.S. data fueled hopes for rate cuts, yet investors remained cautious about policy risks.
- Attention shifts to the Fed’s Beige Book out later Wednesday and the upcoming earnings reports.
The Dow Jones Industrial Average dipped again Wednesday, pressured by a retreat in bank stocks and fresh selling in tech shares. By afternoon, the Dow had dropped 0.60% to 48,894.60. The S&P 500 declined 1.09%, and the Nasdaq Composite fell 1.60%.
The pullback follows closely on the heels of record closing highs for the Dow and S&P 500. Investors now face the tricky task of balancing the kickoff of earnings season with an uptick in policy chatter. Meanwhile, a Justice Department probe into Federal Reserve Chair Jerome Powell has fueled ongoing concerns about the Fed’s independence.
Tuesday’s mood turned grim early. The Dow tumbled 398.21 points, down 0.80%, after JPMorgan leaders flagged concerns that President Donald Trump’s plan to cap credit-card interest rates at 10% might hurt both consumers and the bank’s profits.
Wednesday saw selling accelerate after major banks reported mixed earnings. Wells Fargo dropped 5.6% after missing fourth-quarter profit estimates. Bank of America and Citigroup beat expectations but still saw their shares slip as investors took profits. “It’s not unusual to see a little bit of a pullback,” said Jake Johnston, deputy CIO at Advisors Asset Management. Reuters
The notion of capping credit-card rates is stirring frustrations across the industry. Citigroup CFO Mark Mason warned such a limit “would restrict access to credit” for those who rely on it most. Banks, however, say they remain open to discussions on easing cost-of-living strains. Reuters
Tech stocks took a hit after Reuters reported that Chinese regulators have instructed domestic companies to drop cybersecurity software from about a dozen U.S. and Israeli providers. This move weighed on enterprise security and networking players like Broadcom’s VMware, Palo Alto Networks, and Fortinet.
Economic data came in stronger than anticipated, yet it failed to shift sentiment. U.S. retail sales climbed 0.6% in November, while “core” retail sales — a tighter gauge of underlying demand — rose 0.4%. This suggests consumers stayed active despite delays in data releases caused by a lengthy government shutdown. Reuters
Inflation remains a key factor. The Consumer Price Index climbed 2.7% over the 12 months ending in December, with the core CPI — excluding food and energy — up 2.6%. This keeps the question open on just how fast inflation is truly cooling.
Wholesale inflation remained contained, though not exactly soft. The Producer Price Index, measuring prices firms receive before goods and services hit consumers, climbed 0.2% in November and was 3.0% higher than a year ago. A notable spike in energy costs accounted for much of the increase.
Outside the stock market, demand for hedges remained strong. Gold climbed to new highs, while silver surged past $90 an ounce, fueled by bets on rate cuts and growing geopolitical tensions. “All roads are leading to gold and silver,” said Alex Ebkarian, COO at Allegiance Gold. Reuters
The risk hasn’t vanished: core CPI eased slightly, but underlying pressure—especially from food—remained stubborn. Economists caution the Fed’s favored inflation measure might show more heat once delayed data comes in. New York Fed President John Williams also signaled inflation could hover near 3% into early 2026.
Traders will turn to the Fed’s Beige Book at 2 p.m. ET next—a survey capturing regional business activity and pricing trends—just days before the Jan. 27-28 policy meeting.
