GLOBAL MARKETS-Wall St slips on credit card proposal, rate bets boost gold
Wall Street indexes fell as financial stocks were impacted by credit card policy warnings, while gold reached record highs due to expectations of Federal Reserve rate cuts. U.S. inflation data showed a 0.3% rise in the Consumer Price Index, supporting rate cut prospects. JPMorgan's earnings report initially boosted shares but later declined due to concerns over proposed interest rate caps. Oil prices rose amid unrest in Iran, overshadowing supply concerns from Venezuela. The dollar strengthened against other currencies, reflecting market reactions to economic data and geopolitical tensions.
(Updates with closing prices)
Financials drag stocks lower on credit card warning
Gold hits fresh record on rate cut bets, safe haven demand
Oil surges on Iran troubles
JPMorgan starts a week of bank earnings
By Isla Binnie and Amanda Cooper
Jan 13 (Reuters) - Financial stocks pulled Wall Street indexes lower after warnings about potential changes to lending policy on Tuesday, and gold hit fresh record highs as U.S. inflation data strengthened prospects for rate cuts this year, while unrest in Iran outweighed worries about a supply glut and lifted oil prices.
U.S. President Donald Trump’s proposals to cap credit card interest rates and impose a 25% tariff rate on any country that does business with Iran, along with his attacks on Federal Reserve independence, added to market uncertainty, keeping investors cautious.
Expensive food and rent lifted the Consumer Price Index 0.3% last month for an annual gain of 2.7%. Core CPI rose 0.2% in December. The readings came in line with expectations and bolstered bets the Federal Reserve had more room to cut.
“These readings reinforce the notion that inflation is moderating, and the Fed may be able to cut rates this year,” said Gene Goldman, chief investment officer at Cetera Investment Management in El Segundo, California.
The Dow Jones Industrial Average (.DJI) closed 0.80% lower at 49,191.99, the S&P 500 (.SPX) ended the day 0.19% lower at 6,963.74 and the Nasdaq Composite (.IXIC) racked up a 0.1% daily loss, to end at 23,709.87.
JPMORGAN KICKS OFF U.S. BANK EARNINGS JPMorgan shares (JPM.N) initially rose after the largest U.S. lender reported fourth-quarter profit that beat analysts’ expectations. But they then fell as much as 3% in choppy trading after executives said a proposed cap on credit card interest rates would hurt U.S. consumers and the economy.
Shares in card networks Visa (V.N) and Mastercard (MA.N) fell as much as 5% during the session. The S&P 500 banking index (.SPXBK) fell more than 2%.
Other major earnings releases loom this week, including Bank of New York Mellon (BK.N) , Citigroup (C.N) and Bank of America (BAC.N) .
The banks have warned the rate cap plan could restrict access to credit for millions of American households and small businesses.
Ahead of inflation data, currency traders appeared to have been prepared for a larger increase in prices, said Eric Theoret, currency strategist at Scotiabank in Toronto, noting risk-sensitive currencies, including the Australian dollar, rallied after the report.
The dollar index (=USD) , which measures the greenback against a basket of currencies including the yen and the euro, rose 0.3% to 99.17, with the euro (EUR=) down 0.21% at $1.1643.
The dollar had risen on Friday after data showed jobs growth in December, reinforcing expectations the U.S. central bank will wait until after its January policy meeting to cut rates further.
SAFE HAVEN
Markets have started 2026 with a formidable lineup of geopolitical flashpoints, including Iran, Greenland and Venezuela, adding to concern about record-high equity valuations on benchmarks from New York to London, Tokyo and Frankfurt.
A combination of reinforced bets on Federal Reserve rate cuts and the appeal of a safe haven from the barrage of geopolitical and economic uncertainties propelled gold to the latest in a series of record highs, while silver also hit a fresh peak.
Spot gold (XAU=) steadied at $4,591.16 an ounce, having hit $4,634.33 earlier in the session.
Trump’s pursuit of Federal Reserve Chair Jerome Powell is continuing to raise alarm, with three former Fed chairs signing a statement on Monday decrying the administration’s assault on the central bank’s independence. They warned this is more typical in “emerging economies with weak institutions” and can have highly negative consequences for inflation.
Oil prices scaled multi-week highs on worries that Iran’s exports could decline, as the OPEC member, which is under sanctions, cracks down on anti-government demonstrations. Those concerns eclipsed the prospect of more supply coming from Venezuela after U.S. intervention to oust President Nicolas Maduro. (O/R) Worries over a supply glut this year have taken a back seat for now, said Rystad analyst Janiv Shah.
U.S. crude (CLc1) climbed 2.77% or $1.65 to settle at $61.15 a barrel. Brent (LCOc1) settled at $65.47 per barrel, 2.51% or $1.60 higher on the day.
