New York, January 20, 2026, 14:30 (EST) — Regular session
- MS shares fall in afternoon trade as U.S. financials stay under pressure
- Investors focus on the proposed credit-card rate cap and how it could be enforced
- Traders look for Washington signals and the next Fed policy meeting
Morgan Stanley shares were down 3.5% at $182.53 in afternoon trading on Tuesday. The stock has traded between $182.12 and $187.48 so far in the session.
Bank shares came under pressure as investors waited for the Trump administration’s January 20 deadline on a proposed 10% cap on credit-card interest rates; the S&P 500 Banks index was down about 1.2%. The White House has said the cap would help consumers, but banks say it could curb credit by limiting how they price risk on unsecured loans — borrowing not backed by collateral. “For now, it’s an overhang,” said Brian Jacobsen, chief economic strategist at Annex Wealth Management, while TD Cowen analysts pointed to signs of “a political compromise in the works.” (Reuters)
Wider risk-off trading did the rest, after President Donald Trump threatened to reignite a trade fight with Europe tied to his push over Greenland. The S&P 500 fell 1.39% and the Nasdaq slid 1.64%, while the 10-year Treasury yield climbed to 4.283%. “It’s all coming together for a pretty significant risk off day,” said Wasif Latif, chief investment officer at Sarmaya Partners, noting Tuesday’s moves reflected weekend headlines after a Monday U.S. holiday. (Reuters)
Other big lenders were red as well: JPMorgan fell 2.6%, Goldman Sachs eased 1.8% and Bank of America dropped 1.6%.
Morgan Stanley is coming off a strong set of quarterly numbers last week, when it beat profit estimates as investment banking revived and raised its dividend. CFO Sharon Yeshaya told Reuters the firm is seeing “an accelerating pipeline in M&A and IPOs,” even as CEO Ted Pick warned of geopolitical risks and a “complicated” backdrop. (Reuters)
Trump pitched the credit-card cap as a one-year measure starting Jan. 20, but the administration has not spelled out how it would impose it. Analysts cited by Reuters said Congress would have to act, even as White House press secretary Karoline Leavitt said Trump expected card companies to comply. Senator Elizabeth Warren said she spoke with Trump about advancing rate-cap legislation, and Bloomberg reported the administration is weighing an executive order, with Trump expected at Davos this week to give more detail. (Reuters)
If the cap hardens into law, banks could face a hit to interest income — what they earn on card balances after funding costs — and may respond by tightening limits or cutting back on perks. If it fizzles, investors may treat this week’s dip as a policy scare rather than a reset.
For Morgan Stanley stock, the worry is less about one product line and more about the tone in Washington and the tape. Fee pools follow confidence, and confidence has been thin on days like this.
The next hard dates are the Federal Reserve’s Jan. 27-28 meeting, with the rate decision and press conference on Jan. 28, followed by minutes on Feb. 18. Until then, traders will keep parsing Washington for the next line on the rate-cap plan. (Federalreserve)
