The Week Ahead: Markets Focus on CPI Data and Bank Earnings Reports

• CPI data due Tuesday is forecast at 0.3% month-over-month and 2.7% year-over-year, providing crucial insight into whether the Fed will proceed with anticipated rate cuts in 2026.
• Major banks including JPMorgan, Citigroup, Bank of America, Wells Fargo, Goldman Sachs, and Morgan Stanley report Q4 earnings this week, offering first indicators of credit quality and loan demand for 2026.
• U.S. equities remain in intact uptrends with all major indices above their 52-week moving averages; Atlanta Fed's GDPNow model projects strong Q4 growth near 5.1% despite mixed December jobs data showing only 50,000 jobs added.

Market Summary: CPI Data and Bank Earnings in Focus

Key Market Performance

U.S. equities posted strong gains in the first full trading week of 2026, with the S&P 500 advancing 1.57% to 6,966.28, the Nasdaq Composite climbing 1.88% to 23,671.35, and the Dow Jones Industrial Average surging 2.32% to 49,504.08. All indices finished near recent highs, remaining above their 52-week moving averages, confirming intact uptrends.

Critical Economic Data

The week's focal point is Tuesday's CPI report (Jan 13), with consensus forecasting 0.3% month-over-month and 2.7% year-over-year inflation. Core CPI is expected at 0.3% m/m, up from 0.2% prior. This data will be crucial for Fed rate cut expectations, with markets currently pricing one to two cuts in 2026.

December employment showed job additions of 50,000 versus expectations of 70,000, though unemployment held steady at 4.4%. The Atlanta Fed's GDPNow model projects robust Q4 growth near 5.1%.

Earnings Season Begins

Major banks headline Q4 earnings, providing first insights into 2026 credit conditions and loan demand:

• Tuesday: JPMorgan Chase (est. $4.98), Delta Air Lines (est. $1.57)
• Wednesday: Bank of America (est. $0.96), Citigroup (est. $1.68), Wells Fargo (est. $1.66)
• Thursday: Goldman Sachs (est. $11.53), Morgan Stanley (est. $2.42), Taiwan Semiconductor (est. $2.92), BlackRock (est. $12.30)

Market Outlook

Investors remain optimistic about moderating inflation supporting Fed easing. If CPI aligns with forecasts and bank earnings confirm healthy credit conditions, risk assets could extend their rally through mid-January. Multiple Fed speakers throughout the week will provide additional policy guidance.