S&P and Nasdaq hold as Dow starts lower despite CPI reading matching expectations

• Core CPI rose 2.6% annually, unchanged from November and the slowest pace since March 2021, with shelter costs the largest monthly contributor at 0.4%
• Markets see almost no chance of a January Fed rate cut, pricing the first reduction for June 2026 followed by a second cut later in the year
• JPMorgan Chase kicked off earnings season with weaker quarterly profits after a $2.2 billion hit from its Apple Card business, while President Trump warned of new tariffs on countries trading with Iran

Market Summary: US Indices Mixed as December CPI Meets Expectations

Market Performance:

US markets opened mixed on January 13, 2026, with the Dow Jones falling 149 points (-0.3%) to 49,426, while the S&P 500 rose 0.12% to 6,981 and the Nasdaq gained 0.27% to 23,799. This followed record highs the previous session.

Inflation Data:

The December Consumer Price Index matched expectations, showing headline inflation at 2.7% year-over-year (unchanged from November) and 0.3% month-over-month. Core CPI (excluding food and energy) rose 0.2% monthly and 2.6% annually—the slowest pace since March 2021 and unchanged from November.

Key Inflation Drivers:

• Shelter costs increased 0.4% (largest monthly contributor)
• Food prices climbed 0.7% monthly and 3.1% annually
• Energy prices rose 0.3% monthly and 2.3% annually
• Declines seen in communication services, used vehicles, and household furnishings

Federal Reserve Implications:

According to XTB's Kathleen Brooks, the data provides no reason for the Fed to shift policy. Markets currently price near-zero probability of a January rate cut, with the first cut expected in June 2026, followed by a second later in the year.

Corporate News:

JPMorgan Chase reported weaker quarterly profits after absorbing a $2.2 billion charge related to its Apple Card business, though specific performance details were incomplete in the report.

Geopolitical Risk:

President Trump announced potential new tariffs on countries trading with Iran, adding uncertainty to market sentiment as investors assess inflation, monetary policy, and corporate earnings season.