S&P futures declined on Tuesday as market participants anticipated the forthcoming consumer inflation data and significant bank earnings reports. Futures associated with the Dow Jones Industrial Average experienced a decline of 63 points, representing a decrease of 0.1%. S&P 500 futures slipped 0.2%, while Nasdaq 100 futures declined 0.3%. The consumer price index report scheduled for release at 8:30 a.m. is anticipated to provide a more comprehensive understanding of price dynamics following the disturbances triggered by the extended U.S. government shutdown last autumn. Analysts anticipate that the report will indicate a 2.7% increase in prices over the 12 months concluding in December, as per consensus estimates from Dow Jones. This aligns with the November CPI results, which were lower than anticipated.

The focus is on the CPI following the December jobs report, which indicated a labor market that is slightly weakening but remains stable, likely influencing the Federal Reserve’s decision to refrain from cutting interest rates. According to the reports, the pricing of Fed funds futures indicates expectations for two quarter-point cuts this year, commencing in June. “Investors will likely be watching closely to see whether the recent disinflationary momentum can be sustained now that the BLS has resumed normal operations,” stated Angelo Kourkafas. “In recent months, goods prices have increased from relatively low levels, likely reflecting the pass-through of tariff-related costs.” In contrast, services inflation has exhibited promising indications of gradual moderation. We anticipate that cooling labor-market conditions will lead to additional easing in services inflation throughout 2026.

Investors are closely monitoring the forthcoming fourth-quarter earnings results from JPMorgan, scheduled for release prior to the market opening on Tuesday. The bank is set to initiate a series of quarterly reports anticipated from prominent financial institutions, including Bank of America, Citigroup, and Morgan Stanley, in the near future. Hank Smith, head of investment strategy at Haverford Trust, anticipates robust bank earnings. Major banks are poised to gain from favorable conditions including accelerating economic growth, deregulation, and robust lending, with a steeper yield curve contributing to enhanced profitability, he stated. Monday’s regular trading session witnessed the S&P 500 and the 30-stock Dow achieving new record highs as investors appeared to overlook the implications of the Department of Justice’s criminal investigation into Federal Reserve Chair Jerome Powell.

The Russell 2000 index has attained a new peak, marking an all-time high. Powell, whose term as chair concludes in May, indicated that the investigation represents yet another effort by President Donald Trump to exert influence over the Fed’s monetary policy. Trump has consistently advocated for a substantial reduction in interest rates. The stock market has largely disregarded Trump’s efforts to influence the Fed, as the central bank implemented three cuts to its benchmark interest rate in late 2025 to uphold its dual mandate. In a separate development, the U.S. president proposed a one-year cap on credit card rates at 10%, a move that exerted downward pressure on bank shares during regular trading hours. On Monday evening, Trump stated that any nation engaging in trade with Iran will incur a 25% tariff imposed by the United States.