US stocks: Wall Street falls with financials amid credit card rate plan

[NEW YORK] US stocks ended lower on Tuesday, led by a drop in financial shares as comments from JPMorgan executives added to worries about US President Donald Trump’s recent proposal for a cap on credit-card rates.

Investors also digested a report from earlier in the day showing that a reading on inflation for December came in as expected, leaving intact market expectations for interest rate cuts from the Federal Reserve this year.

Top JPMorgan executives including CEO Jamie Dimon warned that Trump’s proposed 10 per cent cap on credit card interest rates would severely hurt consumers.

That revived a recent selloff in financials over Trump’s proposed one-year cap of 10 per cent on credit card interest rates. Trump last week proposed the cap for one year, starting on Jan 20.

Shares of Visa and Mastercard fell, while the financial sector helped lead declines in the S&P 500. Shares of JPMorgan also fell. The bank reported a better-than-expected quarterly profit but also a drop in investment banking fees.

“Financials are getting hit by Trump’s credit card proposal,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.

“It seems to be sinking in,” he said. “I think it’s going to be extremely difficult to have that become a reality, but it’s still out there.”

Other big banks, due to report their quarterly numbers later this week, were also lower even as analysts expected most banks to post stronger results for the last quarter.

Delta Air Lines shares also eased as the midpoint of its 2026 profit forecast fell short of analysts’ expectations.

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According to preliminary data, the S&P 500 lost 13.97 points, or 0.20 per cent, to end at 6,963.30 points, while the Nasdaq Composite lost 22.70 points, or 0.10 per cent, to 23,711.20. The Dow Jones Industrial Average fell 394.97 points, or 0.81 per cent, to 49,195.23.

The day’s declines most likely reflect “a little bit of letting the air out of the balloon,” after recent record highs, said Oliver Pursche, senior vice president, adviser for Wealthspire Advisors in Westport, Connecticut.

Earnings news overall for the fourth-quarter reporting period will most likely be positive, he said, adding, “I suspect there are going to be some upward revisions.” REUTERS