To The Moon

U.S. stock markets retreated as the fourth-quarter earnings season got off to a shaky start, led by disappointing results from $JPMorgan Chase(JPM)$ , one of the nation’s largest banks. Even encouraging inflation data failed to lift sentiment, highlighting how sensitive markets remain to corporate earnings at elevated valuation levels.

The Dow Jones Industrial Average fell 398 points (-0.8%), while the $S&P 500(.SPX)$ slipped 0.2% and the Nasdaq Composite edged down 0.1%. The Russell 2000, which had recently outperformed, also declined 0.1%, signaling broad-based caution.

JPMorgan Earnings Set a Cautious Tone for Q4

JPMorgan kicked off Q4 earnings season, but the bank’s results underwhelmed investors. Net profit declined 7% year over year, although adjusted earnings exceeded Wall Street estimates.

Management attributed part of the weakness to a one-time impact from a major strategic move: JPMorgan’s newly finalized deal to become Apple’s credit card issuer. The transaction reduced earnings by $0.60 per share during the quarter.

In addition, weaker investment banking fees pressured results, while ongoing concerns over potential regulation, especially President Donald Trump’s proposal to temporarily cap credit card interest rates at 10%, continued to weigh on financial stocks.

As a result, financials were the worst-performing sector of the day, down 1.8%.

Delta Beats, but Guidance Disappoints

Delta Air Lines also reported earnings, beating analyst expectations. However, shares fell 2.4% after the airline issued softer-than-expected guidance for the year ahead, reinforcing fears that corporate outlooks may not justify current market valuations.

While it is still early in earnings season, JPMorgan’s report has shifted sentiment from hopes of a sustained earnings tailwind to concerns about a potential earnings headwind.

Inflation Cools, but Not Enough for the Fed

CPI

On the macro front, December CPI data showed inflation continuing to cool, but not fast enough to prompt near-term action from the Federal Reserve.

• Headline CPI: +2.7% year over year

• Core CPI (excluding food and energy): +2.6%, slightly below expectations

Despite the softer reading, inflation has remained above the Fed’s 2% target for more than four years, and the monthly CPI increase of 0.3% suggests price pressures are still too firm for a January rate cut.

Economists now see the earliest window for rate cuts shifting to spring or summer, assuming inflation continues to moderate and data distortions from last year’s government shutdown fully clear.

Market Snapshot

• Top gainer: $Moderna, Inc.(MRNA)$ (+17.0%)

• Biggest loser: $Salesforce.com(CRM)$ (-7.1%)

• Best sector: Energy (+1.5%)

• Worst sector: $Financial Select Sector SPDR Fund(XLF)$ (-1.8%)

What Investors Are Watching Next

Earnings season continues with results from Bank of America, Citigroup, and Wells Fargo, which could further shape expectations for the banking sector and the broader market.

Upcoming economic data, including PPI, retail sales, existing-home sales, and the Fed’s Beige Book, will also play a key role in determining whether slowing inflation and resilient growth can offset earnings uncertainty.

Bottom Line: Earnings Matter More Than Ever

With U.S. equities trading near record highs, markets are sending a clear message: macro relief alone is not enough. Earnings growth and forward guidance will be critical in determining whether stocks can stabilize, or face further downside, as Q4 earnings unfold…

[Salute]

If you found this summary helpful, be sure to like, comment and subscribe to stay informed on the economic trends shaping markets.

This summary is for informational purposes only and does not constitute financial advice. Investors should conduct their own research before making investment decisions.

@TigerStars

@TigerEvents

@Tiger_comments

@CaptainTiger

@TigerCommunity