Midcap, smallcap indexes outperform S&P 500 so far in 2026
Fed speeches may provide clues on rate trajectory
Futures down: Dow 0.31%, S&P 500 0.4%, Nasdaq 0.59%
Updates with analyst comments, prices
By Medha Singh and Pranav Kashyap
Jan 14 (Reuters) - U.S. stock index futures edged lower on Wednesday as investors digested earnings from Bank of America and Wells Fargo, with retail sales and producer price data due later in the day poised to deliver a fresh read on the economy's pulse.
Shares of Bank of America BAC.N edged 0.5% higher after reporting a higher profit, as its traders brought in more revenue from a spurt in client activity in the fourth quarter.
Wells Fargo WFC.N slipped 2% after missing fourth-quarter revenue estimates, while Citigroup C.N edged lower ahead of its results. On Monday, JPMorgan JPM.N executives warned that a proposed ceiling on credit-card interest rates could squeeze consumers and dent profitability across the financial sector.
While Wall Street's deal desks are expected to benefit from revived dealmaking in the final quarter, investors are also looking for signals on credit quality and consumer sentiment.
Wall Street's main indexes have stalled this week after the Dow and the S&P 500 touched record highs, with traders awaiting fourth-quarter earnings to see if they meet elevated expectations.
Analysts project S&P 500 companies will deliver average fourth-quarter earnings growth of 8.8% year-on-year, lifting full-year 2025 bottom-line expansion to 13.2%, according to IBES LSEG data.
At 6:47 a.m. ET, Dow E-minis YMcv1 were down 153 points, or 0.31%, S&P 500 E-minis EScv1 were down 28.25 points, or 0.4% and Nasdaq 100 E-minis NQcv1 were down 153.75 points, or 0.59%.
PRODUCER PRICES AND RETAIL TESTS LOOM
After December's expected consumer-price rise, investors are now watching Wednesday's producer price and retail sales releases, alongside speeches from Fed voting members John Williams, Anna Paulson, Stephen Miran and Neel Kashkari.
For now, interest rates are widely expected to hold steady through the first half of the year, including at the Fed's January meeting, as long as inflation and growth remain on track. Traders, however, are still pricing in at least two cuts before year-end, according to LSEG data.
"PPI will hold clues on CPI risks," said Elias Haddad, global head of markets strategy at Brown Brothers Harriman.
"Progress towards the Fed's 2% inflation goal is stalling. But upside risks to prices are fading."
Meanwhile, the Danish and Greenlandic foreign ministers will meet with U.S. Vice President JD Vance at the White House later in the day following weeks of threats by President Donald Trump to take control of Greenland, an autonomous territory of Denmark.
So far, markets have largely overlooked geopolitical risks such as the U.S. toppling Venezuela's leader, with enthusiasm around artificial intelligence and fourth-quarter results driving U.S. indexes to new peaks.
The stock market's record rally is also showing early signs of broadening out this year, with S&P 400 midcaps .IDX and S&P 600 smallcaps .SPCY outperforming the largecap S&P 500 .SPX so far this year.
Palo Alto Networks PANW.O and Fortinet FTNT.O fell 3.3% and 2.5%, respectively, before the bell after sources told Reuters that Chinese authorities have told domestic companies to stop using some U.S. and Israeli cybersecurity software due to national security concerns.
(Reporting by Medha Singh and Pranav Kashyap in Bengaluru; Editing by Maju Samuel)
((Medha.Singh@thomsonreuters.com))
