Stock market update: Dow, S&P 500, and Nasdaq futures dip following Fed turmoil as CPI inflation report approaches

US Stock Futures Hold Steady Ahead of Key Economic Updates

On Monday night, US stock futures showed minimal movement as investors awaited crucial inflation data and the beginning of earnings season for major financial institutions.

Futures for the Dow Jones Industrial Average (YM=F) and the S&P 500 (ES=F) dipped by 0.1%, while Nasdaq 100 futures (NQ=F) declined by 0.3%.

Market participants are largely adopting a cautious stance ahead of Tuesday’s release of the December Consumer Price Index. This report is anticipated to provide a clearer view of inflation trends following last year’s extended government shutdown, which disrupted economic data. According to Bloomberg, analysts expect inflation to have remained stable in December.

This inflation report carries added significance after the latest jobs data signaled a slowdown in hiring. Current futures pricing suggests two quarter-point interest rate reductions in 2026, with the first anticipated in June, based on the CME Group’s FedWatch tool.

During Monday’s trading session, equities reached new peaks. Both the S&P 500 (^GSPC) and the Dow Jones Industrial Average (^DJI) set fresh records, as investors appeared largely unfazed by news of a Justice Department investigation involving Federal Reserve Chair Jerome Powell.

Powell, whose current term ends in May, described the investigation as politically motivated pressure from President Trump, who has repeatedly advocated for deeper interest rate cuts. However, markets have largely ignored these calls, noting that the Federal Reserve already reduced rates three times in late 2025 to bolster economic growth.

Despite the broader market’s resilience, bank stocks experienced some headwinds after Trump suggested a temporary 10% cap on credit card interest rates. Additionally, the president announced that countries maintaining business ties with Iran would face a 25% US tariff, introducing further geopolitical uncertainty.

Focus Turns to Bank Earnings

Investors are now looking ahead to corporate earnings, with JPMorgan Chase (JPM) set to release its fourth-quarter results before markets open on Tuesday. This report will mark the start of a busy period for major Wall Street banks, as Bank of America (BAC), Citigroup (C), and Morgan Stanley (MS) are scheduled to report later in the week.