The stock market showed minimal movement on January 12, 2026, with the S&P 500 slightly dropping as investors digested new inflation data and early fourth-quarter earnings reports.
Market Reactions to Inflation Data
The S&P 500 declined by 0.1%, while the Dow Jones Industrial Average fell 289 points or 0.6%. The Nasdaq Composite remained mostly stable. Investors reacted positively to December’s consumer price index, which showed a 0.2% month-to-month increase in core CPI, below economists’ estimates.
Headline inflation rose by 0.3% in December, matching forecasts at an annual rate of 2.7%. This inflation data follows a jobs report indicating a stable, yet softer, labor market, which may influence the Federal Reserve’s decision on interest rates.
Corporate Earnings and Stock Performance
With earnings season underway, investors are focusing on corporate profits to support stock prices. JPMorgan Chase’s shares fell over 1% after its CFO remarked on potential pushback against credit card price controls. Goldman Sachs also dropped more than 1%.
Delta Air Lines experienced a similar decline with mixed financial results. Key reports from Bank of America, Citigroup, and Morgan Stanley are expected later this week.
Outlook for the Banking Sector
Hank Smith, of Haverford Trust, predicts strong earnings for major banks, driven by economic growth, deregulation, and a steeper yield curve, which should enhance profitability.
Wall Street recently set records with the S&P 500 and Dow hitting all-time highs, amidst news of a criminal investigation involving Federal Reserve Chair Jerome Powell. The Russell 2000 index for small companies also reached a new peak.
