Yesterday, with major banks set to kick off the latest earnings season and markets looking towards today’s CPI print, US equities edged higher, overcoming pressure early in the session. That pressure was triggered by the weekend news of the DOJs investigation into Fed Chair Powell and the central bank construction project. After the close President Trump threatened 25% tariffs on any country doing business with Iran, which would include China.

December’s CPI is the headliner for data today and it was basically an inline print. The inability to produce a regular CPI for October and November due to the shutdown muddies the analysis, however. Overall, it leans cooler and probably helps the dove’s case but isn't really changing the narrative much. The S&P 500 opened about flat but saw pressure build as the morning rolled on. We're currently off the lows as we attempt to bounce and the the equal-weight, mid and small caps are outperforming, trading around slightly higher.

Industrials, Utilities and Energy are leading. Energy is following oil higher on global risks, especially Iran. Industrials are also broadly higher, continuing the cyclical bounce to start the year. Staples picked up steam after Alphabet started to come in a little bit after a strong start, bringing Comm Services down from its highs (Alphabet with some follow-through from yesterday's news that Apple chose its AI to power Siri). Financials and Discretionary are lagging. JP Morgan is down following earnings this morning and card and payment names continue to come under pressure following the interest rate cap news. Weakness in travel names is hitting Discretionary.