Stock Index Futures Slip With Focus on U.S. Retail Sales and PPI Data, More Big Bank Earnings on Tap

March S&P 500 E-Mini futures (ESH26) are down -0.44%, and March Nasdaq 100 E-Mini futures (NQH26) are down -0.66% this morning as investors trim risk ahead of a slew of U.S. economic data, including the retail sales report and producer inflation figures, comments from Federal Reserve officials, and earnings reports from some of the biggest U.S. banks.

Market participants also brace for a potential Supreme Court ruling on President Trump’s sweeping tariffs.

In addition, geopolitical risks dampened sentiment as the U.S. continued to threaten direct intervention in Iran. The U.S.-based Human Rights Activists News Agency reported 2,571 deaths linked to Iranian protests as of Wednesday, up from roughly 500 at the start of the week. Reuters reported that some personnel had been advised to leave a U.S. air base in Qatar.

In yesterday’s trading session, Wall Street’s major indexes ended in the red. Software stocks sank after Anthropic released a preview of a new tool designed for a wider range of work-related tasks beyond coding, with Salesforce (CRM) slumping over -7% to lead losers in the S&P 500 and Dow, and Adobe (ADBE) falling more than -5%. Also, shares of credit card companies extended their declines after President Trump called for a one-year cap on credit card interest rates at 10%, with Visa (V) falling over -4% and Mastercard (MA) dropping more than -3%. In addition, Super Micro Computer (SMCI) slid over -5% after Goldman Sachs assumed coverage of the stock with a Sell rating and a price target of $26. On the bullish side, Moderna (MRNA) jumped over +17% and was the top percentage gainer on the S&P 500 after CEO Stephane Bancel said the company expects to launch its combined flu and COVID-19 vaccine over the next two years.

The U.S. Bureau of Labor Statistics report released on Tuesday showed that consumer prices rose +0.3% m/m in December, in line with expectations. On an annual basis, headline inflation rose +2.7% in December, the same as the previous month and in line with expectations. Also, the core CPI, which excludes volatile food and fuel prices, rose +0.2% m/m and +2.6% y/y in December, weaker than expectations of +0.3% m/m and +2.7% y/y. In addition, U.S. new home sales fell -0.1% m/m to 737K in October, stronger than expectations of 716K.

“[Tuesday’s] softer-than-expected core CPI print is unlikely to alter the Fed’s calculus for the January meeting,” said Seema Shah at Principal Asset Management. “With unemployment still low, growth running above trend, fiscal stimulus providing an offset, and inflation remaining above target, the Fed can comfortably keep rates on hold this month and likely over the next few meetings.”

St. Louis Fed President Alberto Musalem said on Tuesday that inflation risks are easing and that he expects prices to start moving toward the central bank’s target later this year. “I think policy is really well positioned right now, balancing both the expected path of the economy and the risks on both sides,” Musalem said. Also, Richmond Fed President Tom Barkin described December’s inflation data as “encouraging.” “It is, I think, a delicate balance right now,” Barkin said, noting that inflation remains above target but does not appear to be accelerating, while unemployment is not spiraling out of control.

Meanwhile, U.S. rate futures have priced in a 97.2% probability of no rate change and a 2.8% chance of a 25 basis point rate cut at January’s monetary policy meeting.

Fourth-quarter corporate earnings season picks up steam, with investors awaiting reports today from major U.S. banks such as Bank of America (BAC), Wells Fargo (WFC), and Citigroup (C). According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +8.4% increase in quarterly earnings for Q4 compared to the previous year.

On the economic data front, all eyes are on the U.S. Retail Sales report for November, which is set to be released in a couple of hours. The report was originally scheduled for release on December 17th, but was delayed due to the fallout from the longest-ever government shutdown. Economists, on average, forecast that Retail Sales will show a +0.5% m/m increase in November.

Investors will also focus on U.S. Core Retail Sales, which rose +0.4% m/m in October. Economists expect the November figure to rise +0.4% m/m.

The U.S. Producer Price Index for November will be closely monitored today. The PPI was originally scheduled for release on December 11th, but was delayed due to the fallout from the shutdown. Economists forecast that the U.S. November PPI will stand at +2.7% y/y.

The U.S. Core PPI will also be released today. Economists expect the November figure to be +2.7% y/y.

U.S. Existing Home Sales data will be reported today. Economists foresee this figure coming in at 4.21 million in December, compared to 4.13 million in November.

The EIA’s weekly crude oil inventories report will be released today as well. Economists expect this figure to be -1.7 million barrels, compared to last week’s value of -3.8 million barrels.

In addition, market participants will be looking toward speeches from Philadelphia Fed President Anna Paulson, Fed Governor Stephen Miran, Atlanta Fed President Raphael Bostic, Minneapolis Fed President Neel Kashkari, and New York Fed President John Williams.

Later today, the Fed will release its Beige Book survey of regional business contacts, which provides an update on economic conditions in each of the 12 Fed districts. The Beige Book is published two weeks before each meeting of the policy-setting Federal Open Market Committee.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.150%, down -0.50%.

The Euro Stoxx 50 Index is down -0.10% this morning as cautious sentiment prevails ahead of a slew of potential catalysts, including Wall Street bank earnings, multiple Fed speakers, U.S. economic data, and a possible Supreme Court ruling on the Trump administration’s tariff policies. Utility stocks outperformed on Wednesday, boosted by gains in RWE and SSE after they were among the developers to win guaranteed electricity price contracts in Britain’s latest offshore wind power auction, which secured a record capacity. Healthcare stocks also climbed, with Orion Oyj (ORNBV.H.DX) surging over +11% after the drugmaker provided solid 2026 revenue guidance. At the same time, media and defense stocks fell. Meanwhile, European Central Bank Vice President Luis de Guindos said on Wednesday that financial markets are not reflecting heightened geopolitical uncertainties that have increased downside risks to economic growth. “High uncertainty in the global environment does not appear to be reflected in current market pricing,” Luis de Guindos said. While he reiterated the ECB’s view that inflation remains in a good place in the region, he said geopolitical and trade pressures could drive inflation in different directions. In other corporate news, Pearson Plc (PSON.LN) slumped over -7% after its largest division lost a contract with New Jersey.

The European economic data slate is empty on Wednesday.

Asian stock markets today closed mixed. China’s Shanghai Composite Index (SHCOMP) closed down -0.31%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +1.48%.

China’s Shanghai Composite Index reversed earlier gains and closed lower today after regulators tightened margin financing rules. In separate statements, exchanges in Shanghai, Shenzhen, and Beijing said they would raise the minimum margin requirement for new borrowings to 100% from 80%, effective January 19th. The move signals authorities’ concern about the pace of a rally that has added $1.2 trillion in value over the past month. Yang Guang, a fund manager at Yuanxi Private Fund Management Partnership, said, “This sends a clear signal from regulators that they want a slow bull market, not an overheated one. If that’s not enough to slow down the rally, there will be follow-up measures.” Property stocks were among the biggest losers on Wednesday. The benchmark index initially climbed as investors cheered upbeat trade data from the country. China’s customs agency said on Wednesday that the nation’s trade surplus, the difference between exports and imports, hit a record $1.19 trillion in 2025 as exports rose 5.5% last year from 2024 in dollar-denominated terms, highlighting the strength of its manufacturing base. Capital Economics economist Zichun Huang said that China’s export resilience is likely to persist through 2026, though exports may contribute less to growth than in 2025. Investor focus now turns to China’s credit lending data for December, due later this week, which will provide further clues on the health of the world’s second-largest economy.

The Chinese December Trade Balance stood at $114.1 billion, weaker than expectations of $114.3 billion.

The Chinese December Exports rose +6.6% y/y, stronger than expectations of +3.0% y/y.

The Chinese December Imports rose +5.7% y/y, stronger than expectations of +0.9% y/y.

Japan’s Nikkei 225 Stock Index closed higher today, hitting a new record high amid reports of a snap election. Healthcare, energy, and bank stocks led the gains on Wednesday. The Yomiuri newspaper reported on Wednesday that Japan’s Prime Minister Sanae Takaichi is weighing a snap lower house election on February 8th after dissolving the house next week. SuMi TRUST strategist Hiroyuki Ueno said that an early snap election in Japan would likely be positive for the stock market, as it would give the Takaichi administration greater scope to implement economic policies and reforms if the ruling party wins more seats. Meanwhile, the yen hovered near its weakest level against the dollar since July 2024, and Japanese government bonds (JGBs) extended their declines on Wednesday, with the yield on five-year bonds climbing to a record high. A sharp drop in the yen since last week has fueled bets that the Bank of Japan may need to accelerate rate hikes to curb further currency weakness, while JGBs have slid amid mounting concerns over debt-funded spending. In corporate news, Dentsu Group plunged over -11% after the Financial Times reported that the company’s efforts to sell its international business were nearing collapse. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +2.95% to 29.70.

Pre-Market U.S. Stock Movers

Palo Alto Networks (PANW) and Fortinet (FTNT) fell over -2% in pre-market trading after Reuters reported that Chinese authorities had told local firms to stop using cybersecurity software from a dozen U.S. and Israeli companies due to national security concerns.

Rivian (RIVN) slid over -3% in pre-market trading after UBS downgraded the stock to Sell from Neutral with a price target of $15.

Warner Bros. Discovery (WBD) dropped more than -1% in pre-market trading after Guggenheim downgraded the stock to Neutral from Buy.

Netflix (NFLX) rose over +1% in pre-market trading after The Wall Street Journal reported that the company was preparing an all-cash bid for Warner Bros. Discovery’s studios and HBO Max streaming business.

Bank of America (BAC) gained about +1% in pre-market trading after the second-largest U.S. bank reported better-than-expected Q4 results.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Wednesday - January 14th

Bank of America (BAC), Wells Fargo (WFC), Citigroup (C), Home BancShares (HOMB), United Community Banks (UCB), H B Fuller (FUL), Calavo Growers (CVGW), RF Industries (RFIL).