U.S. stocks pull back after reaching new highs, financial stocks lead the decline, and Trump's policy remarks trigger market volatility

Source: BlockMedia Original Title: [New York Stock Market Close] U.S. Stocks Hit Record Highs Then Take a Breather…JP Morgan Plunges, Trump Variables Weighing on Market Original Link:

Market Overview

U.S. stock markets experienced profit-taking after reaching historic highs, closing lower overall. Amid weak performance in financial stocks, a series of policy remarks by President Trump have increased market volatility, as investors weigh inflation indicators against Federal Reserve policy paths.

Major Index Performance

On January 13th, local time, the New York Stock Exchange:

• Dow Jones Industrial Average fell 398.21 points (0.80%), closing at 49,191.99
• S&P 500 Index declined 13.53 points (0.19%), closing at 6,963.74
• Nasdaq Composite dropped 24.03 points (0.10%), closing at 23,709.87

CPI Data and Financial Stocks Decline

The December Consumer Price Index (CPI) released on that day met market expectations, rising 0.3% month-over-month and 2.7% year-over-year. Core CPI, excluding volatile food and energy prices, increased 2.6% year-over-year, below expectations.

Despite the CPI data meeting expectations, financial stocks were still sold off. A leading investment bank’s stock price dropped about 3%, despite quarterly earnings surpassing expectations. Although trading division performance improved, investment banking fees did not meet forecasts. Additionally, remarks by President Trump about capping credit card interest rates at 10% annually have heightened concerns over overall regulatory risks in the financial sector.

Other financial stocks also generally declined:

• A global financial institution fell 1%
• Visa and Mastercard each plunged about 4%
• Financial sector ETFs (XLF and KBWB) also declined simultaneously

Policy Remarks Increase Market Uncertainty

A series of policy remarks by President Trump sparked market concerns, including restrictions on dividends and stock buybacks for defense contractors, and bans on large institutional investors purchasing single-family homes. While these remarks are widely seen as unlikely to be implemented, they still negatively impact investor sentiment. An chief investment officer of an investment firm assessed that these measures would be difficult to execute without legislative procedures, relying solely on administrative authority.

Tech Stocks Under Pressure

Technology stocks were also affected. After President Trump announced plans to address rising electricity costs caused by data center construction of a major tech company, the stock still fell over 1%.

Rising Crude Oil Prices

International oil prices surged sharply due to heightened Middle East risks. President Trump stated he would cancel all meetings with Iran and impose a 25% tariff on countries trading with Iran, escalating geopolitical tensions.

Federal Reserve Policy Expectations

Federal Reserve policy expectations remain relatively stable. The market anticipates the Fed will cut interest rates twice this year, with the first cut possibly around June. However, the Department of Justice’s initiation of a criminal investigation into Fed Chair and ongoing pressure from President Trump have raised concerns about the Fed’s independence, shaking confidence in policy judgments.

Market Outlook

Wall Street analysts generally believe that political risks and policy uncertainties may limit stock market gains in the short term, but as long as inflation and employment conditions do not deteriorate sharply, a sustained downward trend is unlikely.