Dow S&P 500 Nasdaq fall as softer inflation keeps Fed uncertainty alive: US stock market crashes again today: Why Dow, S&P 500, and Nasdaq are down – Wall Street turns red again as inflation data calms fears but complicates the Fed outlook
The Dow dropped 0.73% to 49,226.72 in mid-morning trade. The S&P 500 slid 0.39% to 6,949.74. The Nasdaq lost 0.44% to 23,628.97. Losses came after markets closed at record highs a day earlier, triggering profit-taking across sectors.
Inflation data released Tuesday showed mixed signals. Headline consumer prices rose 0.3% in December and 2.7% year over year, matching forecasts. Core inflation slowed to 0.2% for the month and 2.6% annually, the lowest since early 2021. The report eased fears of runaway inflation. But it also reduced urgency for the Federal Reserve to cut rates.
Markets now expect the Fed to hold rates steady at its January meeting. Hopes for early rate cuts have faded. That outlook pressured stocks, especially after last year’s strong rally.
Uncertainty around the Fed added to the tension. Chair Jerome Powell remains under political and legal scrutiny, raising concerns about central bank independence. Investors worry that prolonged pressure on the Fed could lift inflation expectations and keep rates higher for longer.
Earnings season also weighed on sentiment. JPMorgan Chase kicked off big-bank results with a quarterly earnings miss. The bank took a $2.2 billion hit tied to its Apple Card business. Shares fell about 2%, dragging the Dow lower. Results from Bank of America, Citigroup, and Morgan Stanley are due later this week.
Outside earnings, geopolitical risks resurfaced. Oil prices climbed above $65 a barrel for the first time since November. Rising energy prices raise fresh inflation risks. President Donald Trump also warned of new U.S. tariffs on countries trading with Iran, adding trade uncertainty to fragile markets.
Why Dow, S&P 500, and Nasdaq are down
The Dow Jones Industrial Average dropped 363.48 points (0.73%) to 49,226.72 today, leading a broad market sell-off. The S&P 500 slid 0.39% to 6,949.74, while the Nasdaq fell 0.44% to 23,628.97. High geopolitical tension, a criminal probe into Fed Chair Jerome Powell, and JPMorgan’s earnings miss fueled the decline. Despite cooling core inflation at 2.6%, new 25% Iran tariffs sparked fresh recession fears across Wall Street.
Inflation data calms fears but complicates the Fed outlook
The main catalyst for today’s volatility was the December Consumer Price Index report from the U.S. Bureau of Labor Statistics. Headline inflation rose 0.3% month over month and 2.7% year over year, exactly in line with Wall Street forecasts. More importantly for markets, core inflation — which strips out food and energy — increased just 0.2% on the month and 2.6% annually. That marked the lowest core inflation reading since early 2021.
On the surface, the data looked supportive for stocks. Inflation is clearly cooling, and price pressures are no longer accelerating. But for investors, the report also reinforced a more cautious Federal Reserve path. With inflation still above the Fed’s 2% target, policymakers are widely expected to keep interest rates unchanged at their January meeting.
Traders using futures markets now see a strong chance that rates stay steady in the near term, with only a modest probability of cuts later in 2026. That “higher for longer” backdrop continues to pressure equity valuations, particularly after last year’s powerful rally.
Fed independence concerns add to market unease
Beyond the data, investors are also grappling with growing political tension surrounding the central bank. Federal Reserve Chair Jerome Powell remains under scrutiny following a Justice Department investigation, which Powell has described as politically motivated.
The situation has sparked rare public reactions from former policymakers and financial leaders, who warn that any erosion of Fed independence could backfire by lifting inflation expectations and pushing long-term interest rates higher. Those concerns resurfaced after President Donald Trump renewed calls for aggressive rate cuts, increasing uncertainty just as markets seek clarity on monetary policy.
This backdrop has made investors more sensitive to even small shifts in inflation or labor market data, amplifying day-to-day market swings.
Earnings season starts with banks under pressure
Earnings also played a major role in today’s market moves. JPMorgan Chase, the largest U.S. bank by assets, kicked off the big-bank reporting season with a quarterly earnings miss. The results were weighed down by a $2.2 billion hit to net income linked to its Apple Card partnership. JPMorgan shares fell about 2% in early trading, dragging the Dow lower.
Investors are now looking ahead to results from Bank of America, Citigroup, and Morgan Stanley later this week. With stocks near record highs, expectations are elevated, and any disappointment is being punished quickly. Financials, which had benefited from higher interest rates over the past year, are now facing margin pressure as rate cuts get pushed further into the future.
Hot stocks move despite broader market weakness
Despite the broader decline, several individual stocks posted sharp moves. Intel jumped nearly 7% on heavy volume, while Advanced Micro Devices surged close to 6%, signaling continued investor appetite for selective semiconductor plays. Nvidia slipped modestly, reflecting profit-taking after a strong recent run.
On the riskier end of the market, smaller-cap and speculative names saw outsized swings, underscoring the uneven nature of today’s trading. That divergence highlights a market increasingly driven by stock-specific news rather than broad optimism.
Geopolitics and oil prices add another layer of risk
Adding to the cautious tone, oil prices pushed above $65 a barrel for the first time since November, fueled by rising geopolitical tensions involving Iran and Venezuela. Higher energy prices raise the risk of renewed inflation pressure, something the Fed is watching closely.
President Trump also warned that countries continuing to do business with Iran could face new U.S. tariffs, reviving concerns about global trade disruptions. For investors, these developments complicate an already fragile outlook.
Today’s top stock gainers: Biggest movers investors are watching right now
Several stocks surged on heavy volume in Tuesday’s session, driven by sharp momentum trading, sector-specific news, and renewed risk appetite in select names. Here’s a clean, data-led rewrite of today’s top gainers, focusing on price action, volume, and why these stocks stood out.
Envirotech Vehicles Inc (EVTV)
Envirotech Vehicles was the clear standout of the day. Shares jumped 47.01% to $3.69, powered by massive trading activity. Volume topped 101 million shares, far above normal levels. The move signals aggressive speculative interest, especially given the stock’s wide 52-week range of $0.33 to $11.80. Traders are chasing momentum despite elevated volatility.
Intel Corporation (INTC)
Intel climbed 6.74% to $47.03, continuing its recent rebound. Trading volume reached 57 million shares, reflecting strong institutional participation. The stock is now trading near the top of its 52-week high of $47.47, supported by optimism around restructuring efforts and long-term AI competitiveness.
Advanced Micro Devices, Inc. (AMD)
AMD gained 4.98% to $218.03 as investors rotated back into high-growth chip stocks. Volume hit 24 million shares, signaling steady demand. Despite remaining well below its 52-week high of $267.08, AMD continues to benefit from strength in AI-related computing demand.
Ambitions Enterprise Management Co. L.L.C Class A (AHMA)
AHMA posted a sharp 89.89% surge to $10.03, one of the most volatile moves of the session. Trading volume reached 30 million shares, suggesting speculative trading rather than fundamentals. The stock remains far below its 52-week high of $18.20, highlighting continued risk.
iOThree Limited (IOTR)
iOThree Limited jumped 30.46% to $3.40 on strong volume of 20 million shares. The move reflects renewed interest in small-cap tech names, although the stock is still well off its 52-week high of $59.80, underscoring its speculative nature.
Bitfarms Ltd. (BITF)
Bitfarms edged higher by 2.15% to $3.10 as crypto-linked stocks stabilized. Volume reached 19 million shares. The modest gain comes amid steady Bitcoin prices, with the stock still trading within a wide 52-week range starting at $0.67.
Post Comment