US stock markets closed lower on Tuesday, with major indexes retreating from recent highs. The Dow Jones Industrial Average fell 0.8%, leading the decline, while the S&P 500 lost about 0.2% and the Nasdaq Composite dropped roughly 0.1%.
The trading day began with the release of December's Consumer Price Index data. The report showed headline inflation at 2.7% annually and 0.3% monthly, matching forecasts. Core consumer prices rose 0.2% over the previous month and 2.6% over the previous year, marking the lowest annual increase since early 2021.
JPMorgan Chase reported quarterly earnings that missed expectations, taking a $2.2 billion hit to net income from its Apple Card deal. Shares in America's largest bank fell over 4%. The bank's results unofficially opened the fourth quarter earnings season, with Bank of America, Citigroup, and Morgan Stanley scheduled to report in coming days.
During an analyst call, JPMorgan CEO Jamie Dimon voiced support for Federal Reserve Chair Jerome Powell. "Everyone we know believes in Fed independence, and so do we," Dimon said. "And anything that chips away at that is probably not a great idea."
Powell disclosed Sunday that the Department of Justice had opened a criminal investigation into his testimony before Congress last year. President Trump criticized Powell on Tuesday, calling him either "incompetent" or "crooked." Powell characterized the probe as political pressure from Trump, who has repeatedly called for aggressive interest-rate cuts.
Global central bankers, including former Fed chairs Janet Yellen and Alan Greenspan, have condemned the Justice Department's investigation, viewing it as a threat to the Fed's autonomy. Powell's term as Fed chair expires in May.
Trump visited a Ford plant in Detroit on Tuesday, taking selfies with workers and promoting US manufacturing. Michigan is considered a key battleground state for upcoming elections.
Late Monday, Trump said countries continuing to do business with Iran would face a 25% US tariff. This announcement adds to existing geopolitical uncertainties involving Venezuela and Greenland, and could threaten the US trade truce with China.
Traders have firmed up bets on the Fed holding steady this month, according to the CME FedWatch Tool. Odds have slightly shifted for a rate cut in subsequent months, with traders still expecting the first of two quarter-point cuts in June.