OPENING CALL
U.S. stock futures fell Wednesday after Tuesday's session saw shares dragged by JPMorgan Chase results.
The prospect of fresh geopolitical tensions continued to loom over markets and investors sought safe-haven assets driving precious metals to new records.
It comes amidst continued concern regarding the independence of the Federal Reserve.
Metzler Asset Management argues the reaction of the bond market will be key in determining whether Trump continues putting further pressure on the Fed.
"Movements in gold or the dollar won't stop Trump. The only real limiting factor would be a nervous bond market," it said, adding that as long as yields remain stable and the bond market doesn't protest, political pressure will continue to increase.
Meanwhile, more bank earnings are due, including prints from Citigroup, Wells Fargo and Bank of America.
Producer Price Index data for November are also expected, so too are retail sales figures, after Tuesday's consumer price data indicated inflation remained contained .
"The PPI data could help form a more complete view of inflation dynamics and could act as a catalyst for renewed volatility across currency and bond markets if it delivers a meaningful surprise," Exness said.
Wednesday could also see the Supreme Court weigh in on the legality of Trump's tariffs, which ING said it assumes will be struck down.
Stocks to Watch
Netflix shares rose 1% as investors weighed news the streamer is preparing an all-cash bid for Warner Bros. Discovery's studios and HBO Max divisions.
Nvidia stock slipped 0.45% after the Trump administration said it needed to meet security requirements before exporting H200 artificial-intelligence chips to China.
TG Therapeutics shares 6.9% after the company raised annual revenue guidance.
U.S. house-builders shares declined after Federal Housing Finance Agency Director Bill Pulte questioned stock buybacks in the sector in an interview with The Wall Street Journal . D.R. Horton fell 0.9%, Lennar Corporation declined 1.15% and PulteGroup slipped 0.15%.
Watch For:
Retail sales for November, existing home sales for December, EIA Weekly Petroleum Status Report
Today's Top Headlines/Must Reads:
- The Collapse of a Car-Parts Supplier Puts Spotlight on How Cash Flow Can Lie
- The Obscure Bank Collapse That Sent Iran Into a Tailspin
- How Grocery Aisles Are Changing in the Age of MAHA and Ozempic
MARKET WRAPS
Forex:
The dollar was steady against a basket of currencies, as investors moved cautiously ahead of U.S. economic data and amid concerns about the Fed. The impact on the dollar was modest so far.
U.S. military strikes on Iran are now more likely. That said, traders shouldn't expect the dollar to react much , Commonwealth Bank of Australia said, adding that unless oil or equity prices move significantly, the dollar has mostly shrugged off geopolitical tensions in recent times.
The current strength of the dollar against the yen likely reflects a shift in market confidence, rather than a short-term rally, XS.com said, reckoning traders favor the dollar because its economy remains "resilient enough."
The euro trades flat against the dollar and any progress in talks over Greenland Wednesday could remove a lingering geopolitical risk for the single currency even though it's unlikely to have a major impact, ING said.
Bonds:
The two-year and 10-year Treasury yields were slightly lower in European hours, but they overall remained resilient in the face of political pressure on the Federal Reserve, geopolitics and economic data.
Energy:
Oil prices rose after being down earlier as traders considered developments in Venezuela and assessed escalating unrest in Iran.
Up to 3.5 million barrels a day of oil, of which nearly 2 million barrels a day reaches the international market could be affected by any disruption to Iran's oil industry, ANZ said.
Oil prices were likely to trade in the high $50s for much of this year, possibly with some deviation for the coming weeks, according to Julius Baer.
With the big picture unlikely shifting, Iran does not seem an enough of a trigger to sustain oil prices above $65 and rejuvenate the drilling and production of U.S. shale oil.
Gas
European natural-gas prices fell but held above 31 euros a megawatt hour on higher heating demand and fears escalating tensions in Iran could disrupt LNG supplies.
"A potential interruption of Iran's pipeline gas flows to Turkey could see European buyers buying more LNG just as demand in Asia is on the rise," ANZ said separately.
Metals:
Precious metals climbed to fresh record highs , with silver breaking above $90 an ounce on softer-than-expected U.S. inflation data and rising geopolitical risks. New York gold futures rose 0.9% after reaching a record of $4,647.60.
"Persistent tensions, including political pressure on the Fed and geopolitical flashpoints, have lent further support to precious metals, with some possibility that silver and gold could reach new milestones in the coming months. Markets are also watching a U.S. section 232 investigation that could lead to tariffs on silver, potentially tightening available inventories," MUFG said.
The prospects for gold and silver remained positive in 2026 with geopolitical tensions, concerns about the independence of the Fed and a lack of fiscal discipline in the U.S. likely playing major roles in sustaining investment inflows into gold, according to ANZ.
TODAY'S TOP HEADLINES
Tesla's Full Self-Driving System Will Only Be Available Via Subscription, Musk Says
Tesla Chief Executive Elon Musk said the electric-vehicle maker would stop selling a suite of advanced driver assistance features for a one-time payment, switching instead to a monthly subscription service.
The company's Full Self-Driving system makes it easier for drivers to change lanes and navigate around other vehicles and objects, but doesn't make vehicles fully autonomous and is meant to be used only with a fully attentive driver.
BP Flags $5 Billion Write-Down in Low-Carbon Segment, Warns of Weak Oil Trading
BP flagged a write-down of up to $5 billion in its gas and low-carbon energy segment and warned its oil-trading performance would be weak, as the latest energy major to forecast an earnings hit to cap a tough year for the industry.
The London-based energy company is in the early stages of a turnaround intended to reverse falling profits and boost its share price, which has come under pressure after its strategic misstep into low-carbon energy.
China Regulator Discloses Probe Into Trip.com
China's top market regulator said an investigation is underway over Trip.com Group's alleged antitrust conduct.
The State Administration for Market Regulation said Wednesday that it has started a probe into Trip.com after initial investigations.
Saks Global Files for Bankruptcy, Undone by Debt and a Luxury Slump
The parent of Saks Fifth Avenue and Neiman Marcus filed for bankruptcy protection, barely a year after an ambitious bet on luxury department stores brought the two storied retailers together in what was supposed to be a powerhouse deal.
The swift unraveling of Saks Global shows the perils of doubling down on department stores, whose golden days are long past. The plan behind the $2.7 billion merger was to create a luxury juggernaut, while cost savings from the deal were expected to help Saks dig out of a deepening hole of delayed payments to suppliers.
Trump Wants to Run the Economy Hot. There's a Good Chance He'll Succeed.
Most years, presidents don't have much impact on the economy; it is just too big and complicated.
This year won't be like most years. President Trump is taking unprecedented steps to run the economy hot, and there is an excellent chance he'll succeed.
China's Trade Surplus Reaches Record, Defying Expectations of Tariff-Driven Slowdown
When President Trump returned to the White House last year, economists predicted new tariffs would stifle China's massive export machine.
Instead, China's trade surplus, the difference between its exports and imports, reached a record in 2025 at $1.19 trillion. Exports jumped 5.5% last year from 2024 in dollar-denominated terms, compared with 5.9% growth the prior year, China's customs agency reported Wednesday.
Market Underprices Geopolitical Uncertainties, ECB's Vice President Says
Financial markets aren't registering increased geopolitical uncertainties that have raised downside risks to economic growth, the European Central Bank's vice president said Wednesday.
"High uncertainty in the global environment does not appear to be reflected in current market pricing," Luis de Guindos said in a speech in Madrid.
China Imports to Help Lower U.K. Inflation to Target, BOE's Taylor Says
The U.K.'s annual rate of inflation is likely to fall to the Bank of England's 2% target by the middle of this year, aided by cheap imports from China and allowing for further cuts in borrowing costs, rate-setter Alan Taylor said Wednesday.
The Columbia University economics professor said there are signs that Chinese businesses facing high tariffs in the U.S. have sought and found new customers in the U.K. and other parts of Europe by lowering their prices.
Venezuela Frees Detained Americans in Slow Release of Political Prisoners
The Venezuelan regime released a handful of American prisoners on Tuesday, a step U.S. officials described as a positive move by the allies of the deposed authoritarian leader Nicolás Maduro.
The officials released few details about the American prisoners. Maduro, whom the U.S. ousted in a midnight incursion on the capital, Caracas, this month, has long used U.S. citizens as bargaining chips, whether innocent or guilty of the crimes, American officials have said in the past.
(MORE TO FOLLOW) Dow Jones Newswires
01-14-26 0628ET
