The Japan Times - US stocks retreat from records as oil prices jump

The US consumer price index rose 2.7 percent last month, the same rate as in November and in line with expectations.

While the inflation report keeps alive the prospect of interest rate cuts by the Federal Reserve in 2026, US equities tripped into negative territory as Tuesday's session progressed.

All three major indices finished in the red, led by the Dow, which was weighed down by a more than four percent drop in JPMorgan Chase shares.

Both the Dow and S&P 500 had finished at records on Monday.

Chief Executive Jamie Dimon described the US economy as "resilient" but investment banking results lagged behind expectations and some analysts questioned the lender's heavy capital spending plans.

Shares of other banks and credit card companies have also been pressured by President Donald Trump's call last week to cap credit card interest at 10 percent -- one of several recent Trump statements that have caught markets off guard.

"Trump said a lot of stuff" and the market is quite lost where to look at, said Pat Donlon of Fiduciary Trust Company.

"It's like around Liberation Day," Donlon said, recalling Trump's April 2025 announcement of sweeping tariffs that sparked market volatility. "We get these wild swings and are back living on Truth Social posts."

The price of oil surged around three percent as Trump announced steep tariffs on anyone trading with Iran, sparking expectations that the threat will restrict supplies of crude.

"Supply concerns remained front and center after President Trump announced new tariffs on US imports from any countries trading with Iran, raising fears of further disruptions from one of OPEC's largest producers," said David Morrison, senior market analyst at Trade Nation, a financial services provider.

"Iran's domestic unrest, alongside escalating rhetoric around potential military action, added to the geopolitical premium," he said.

European stock markets finished the day little changed.

Earlier Tuesday, Tokyo equities closed at a record high and the yen fell on speculation over a snap election in Japan which would allow Prime Minister Sanae Takaichi to capitalize on strong poll numbers.

Takaichi was appointed Japan's first woman prime minister in October and her cabinet enjoys an approval rating of around 70 percent.

Seoul climbed 1.5 percent after South Korean chip giant SK hynix said it would spend 19 trillion won ($12.9 billion) building an advanced chip packaging plant, as the firm rides the global AI boom.

- Key figures at around 2130 GMT -

Brent North Sea Crude: UP 2.5 percent at $65.47 per barrel

West Texas Intermediate: UP 2.8 percent at $61.15 per barrel

New York - Dow: DOWN 0.5 percent at 49,191.99 (close)

New York - S&P 500: DOWN 0.2 percent at 6,963.74 (close)

New York - Nasdaq Composite: DOWN 0.1 percent at 23,709.87 (close)

London - FTSE 100: FLAT at 10,137.35 (close)

Paris - CAC 40: DOWN 0.1 percent at 8,347.20 (close)

Frankfurt - DAX: UP 0.1 percent at 25,420.66 (close)

Hong Kong - Hang Seng Index: UP 0.9 percent at 26,848.47 (close)

Shanghai - Composite: DOWN 0.6 percent at 4,138.76 (close)

Tokyo - Nikkei 225: UP 3.1 percent at 53,549.16 (close)

Euro/dollar: DOWN at $1.1643 from $1.1667 on Monday

Pound/dollar: DOWN at $1.3426 from $1.3465

Dollar/yen: UP at 159.15 yen from 158.14 yen

Euro/pound: UP at 86.71 pence from 86.64 pence

burs-jmb/iv

K.Tanaka--JT