Wall St slides as Trump’s credit card rate cap plans dent financials

Stocks on Wall Street struggled with financial firms in the spotlight as US President Donald Trump’s plan to impose a 10% cap on credit card interest rates sapped demand for the likes of Visa and Mastercard, and after JPMorgan Chase’s quarterly investment bank earnings fell short of expectations, with the sentiment spreading to capture fintechs including Afterpay-owner Block, which is also listed on the ASX.

Airlines were among laggards after Delta Air Lines’ profit forecast wasn’t raised as much as analysts were expecting, Boeing’s aircraft deliveries in 2025 were the highest in seven years.

Oil prices continued to rise as US President Trump urged Iranian protesters to keep up their campaign, taking to the Truth Social platform to say help is on the way, while softer than expected US inflation in December didn’t sway expectations on the Federal Reserve’s predicted interest rate path.

And in the antipodes, Australian futures are pointing to a fractionally stronger start to the day for the S&P/ASX 200 index, while Statistics New Zealand figures on new building permits and filled jobs are due, following Cotality data showing construction costs accelerated in the December quarter.  

Credit where it’s due

Stocks on Wall Street fell with financial stocks weighing more heavily on the blue chip Dow Jones Industrial Average, which was down 0.7% in late trading, with credit card providers Visa and Mastercard among those weighing as investors remained wary of US President Donald Trump’s plan to impose a cap on their interest rates.

JPMorgan Chase fell 3.7% in late trading with the megabank warning that a cap on credit card interest rates could hurt consumers, coming as the lender’s quarterly earnings disappointed investors with investment banking fees falling short of expectations.

The downbeat tone on financials captured fintech operators such as Afterpay-owner Block, which also has a listing on the ASX, and Paypal, coming as Wall Street banks report their December earnings.

Bank of New York Mellon was among gainers on the day as rising fees and interest income beat expectations.

The sour sentiment outweighed a more benign inflation report than economists predicted, as US core consumer price inflation maintained its pace in December, keeping expectations on the Fed’s rate path intact.

Meanwhile, airlines were broadly weaker after Delta’s increased profit forecast missed expectations, and as Boeing reported its busiest year since 2018 after a turbulent period for plan makers. Shares of local carrier Air New Zealand are up 0.9% so far this year.

The S&P 500 was down 0.4% in late trading, while the Nasdaq Composite fell 0.3%, while across the Atlantic, the UK’s FTSE 100 was marginally weaker, Germany’s DAX 30 nudged up 0.1% and France’s CAC 40 dipped 0.1%.

Elevated energy

Brent crude oil futures rose 2.1% to US$65.19 a barrel at 7am in Auckland, with the fuel prices remaining elevated in the heightened uncertainty of the geopolitical environment as Trump urged Iranian protesters to keep up their campaign rallying against the Middle Eastern nation’s regime. The US president has been considering intervening in the deadly protests and said on the Truth Social platform that help is on the way for the protesters.

Precious metals have been a favoured haven for investors in the environment, with gold futures dipping 0.1% to remain elevated at US$4,609 an ounce.

That’s been a tailwind for Australia’s resources-heavy bourse and futures are pointing to a 0.1% gain for the ASX200 when trading opens across the Tasman, while the kiwi dollar gave up yesterday’s gains, falling to 57.40 US cents at 7am in Auckland from 57.77 cents.

Local data include Stats NZ’s November building permits and filled jobs, while ANZ’s commodity price index is also scheduled.

Cotality’s Cordell construction index showed building costs rose 0.9% in the December quarter in the fastest pace since September 2024, though still below the long-run average of 1%. Fletcher Building yesterday reported increased light product volumes in the December quarter.

Meanwhile, Chinese trade figures will be on the radar for exporters exposed to the world’s second-biggest economy such as a2 Milk Co and Comvita.

Reporting by Paul McBeth. Image from Clay Banks on Unsplash.