NEW YORK (AP) — Stocks are holding near their records on Wall Street following the latest update on inflation, one that could keep the door open for the Federal Reserve to cut interest rates further later this year. The S&P 500 was little changed in early trading Tuesday. The Dow Jones Industrial Average slipped 38 points, and the Nasdaq composite was flat. Bond yields held relatively steady after the inflation data strengthened expectations that the Fed may be able to cut its main rate at least twice this year to shore up the job market. Delta Air Lines sank after issuing a weaker-than-expected forecast.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
U.S. markets inched slightly lower before the opening bell Tuesday as investors pore over the first big earnings reports before turning their attention to the government's latest inflation data.
Futures for the S&P 500 and the Dow Jones Industrial Average each dipped 0.1% before the opening bell. Futures for the Nasdaq were off 0.2%.
JPMorgan shares rose less than 1% after the New York investment bank beat Wall Street's revenue and profit forecasts on a strong performance in markets and growth in its consumer banking division.
Delta Air Lines, which just barely beat Wall Street's fourth-quarter targets, tumbled 5% after its 2026 guidance disappointed investors.
Credit card companies, which were among the bigger losers on Monday after President Donald Trump said he wanted a one-year, 10% cap on credit card interest rates, stabilized overnight. Synchrony Financial, Capital One Financial and American Express all ticked up less than 1% before markets opened Tuesday.
Later Tuesday, the Labor Department was due to report on U.S. consumer inflation in December. It is expected to say consumer prices rose 2.6% in December compared with a year earlier, according to economists’ estimates compiled by data provider FactSet.
Inflation has stubbornly remained above the Federal Reserve's 2% target, casting doubt about whether the U.S. central bank will cut interest rates at its next meeting later this month. The Fed trimmed its benchmark lending rate three times to close out 2025.
Lower interest rates mean cheap credit and tend to fuel stronger stock prices, but can also feed inflation.
Tensions between Trump and Fed Chair Jerome Powell spilled over from the weekend into trading Monday after the Department of Justice subpoenaed the Fed and threatened a criminal indictment over Powell’s testimony regarding building renovations at the central bank’s headquarters.
In a video released Sunday evening, Powell described the threat of criminal charges as simple “pretexts” to undermine the Fed’s independence when it comes to setting interest rates.
Trump has repeatedly called for the Fed to further lower interest rates and reduce borrowing costs for households and companies, however, the White House said Monday that Trump did not direct his Justice Department to investigate Powell.
Elsewhere, at midday in Europe, Germany’s DAX fell 0.1% while the CAC 40 in Paris declined 0.5%. The FTSE 100 in London was effectively unchanged.
Asian shares mostly gained led by a rally in Japan. Tokyo’s Nikkei 225 surged 3.1% to 53,549.16 at close, a record. Technology-related stocks helped lift the benchmark. Compute chip testing equipment maker Advantest surged 8.5%. Chipmaker Tokyo Electron jumped 8.2% and SoftBank Group rose 4.3%.
The dollar rose to 158.90 yen, up from 158.07 yen. The dollar has been trading near its highest level against in the yen in more than a year on what market watchers call the “Takaichi trade” for Prime Minister Sanae Takaichi, who took office in October.
Takaichi is expected to try to capitalize on her relatively high public ratings to call a snap election, hoping to strengthen her mandate for higher government spending. That has led to a weakening in the yen.
Hong Kong’s Hang Seng advanced 0.9% to 26,848.47. Shares of China-based chip designer GigaDevice Semiconductor jumped as much as 54% in the company’s Hong Kong trading debut. The Shanghai Composite index fell 0.6% to 4,138.76.
South Korea’s Kospi closed 1.5% higher at 4,692.64 at close, also a record.
In Australia, the S&P/ASX 200 gained nearly 0.6% to 8,808.50. Taiwan’s Taiex rose 0.5%, while the Sensex in India lost almost 0.3%.
U.S. benchmark crude oil climbed $1.17 to $60.67 per barrel. Brent crude, the international standard, also gained $1.17 to $65.04 per barrel.