Market Report.
🏛️ Opposition is mounting to the Trump administration’s reported criminal investigation into Federal Reserve Chair Jerome Powell, which has sparked bipartisan criticism. The investigation has drawn swift backlash from lawmakers across party lines.
⚖️ Powell accused Trump of attempting to intimidate him for not cutting rates beyond what the Fed deemed appropriate, calling the probe “an unprecedented attempt to use prosecutorial attacks to undermine the Fed’s independence.”
🔥 For the first time, Powell has responded defiantly. This backlash from Powell represents a significant development, as he has largely turned the other cheek to years of Trump’s criticism of the Fed.
📉 Fed chair’s defiant response has created an unexpected challenge for the administration’s efforts to exert more control over monetary policy decisions. This clash over the Fed’s independence could have significant implications for the administration’s economic agenda going forward.
🌍 Anyway, the focus remains on the geopolitical events with which we start 2026.
🚨 Trump’s initial actions against Iran related to the uprisings against his government have already been reported. President Trump announced that any country doing business with Iran will face a 25% U.S. tariff “on any and all business being done with the United States of America.” Trump stated this new tariff is “effective immediately” and is “final and conclusive.”
⚔️ Trump has previously threatened military action against Iran if the killings of protesters continue, and has explicitly encouraged the demonstrations against the Iranian regime.
🏛️ The announcement of these new tariffs on Iran’s business partners comes ahead of a Supreme Court ruling on the legality of many of Trump’s previous expansive tariffs, which were invoked using the International Emergency Economic Powers Act (IEEPA).
📰 According to the Western press, Iran has killed hundreds of protesters. The Chinese media, Global Times, reports that, Iran’s foreign ministry summoned the envoys of Britain, Germany, France and Italy yesterday. During the meeting, Iranian officials showed the envoys “video evidence of violent acts by rioters,” saying the actions went beyond peaceful demonstrations” Showing armed men shooting among the demonstrators.
🕵️ The Jerusalem Post, an Israeli media, mentioned that Israeli agents would be participating in the protests in Iran. The Mossad issued an unusual message in farsi urging protesters to act, stating that It is with them on the streets.
⚖️ The head of the judiciary of Iran has announced that rioters will have to pay compensation for the damage caused. The government could confiscate rioters’ assets.
🇹🇷 Turkey warns the US and Israel to stay away from Iran and accuses Israel of fueling protesters.
🚨 During the last few hours, the U.S. State Department issues a security alert calling upon all U.S. citizens to leave Iran immediately. Some sources suggest that a US military action against Iran may be underway.
📊 Returning to economic matters, the British public’s expectations for inflation in the next 12 months edged down to 3.6% in December from 3.7% in November, according to a monthly survey conducted by Citi and YouGov. Longer-term inflation expectations also weakened, falling to 3.8% from 3.9%.
🏦 However, Bank of England Governor Andrew Bailey expects inflation to hit the BoE’s 2% target by April or May 2026.
📈 Citi analysts believe the latest expectations survey may not be convincing enough to dispel concerns among some BoE policymakers about inflation remaining too high. But Citi expects inflation expectations to continue softening as realized inflation comes down in the first half of 2026.
🍒 Finally, the cherry on top for our investor readers. Wall Street is interpreting the Trump administration’s economic messaging and potential policy actions as a clear signal to favor cyclical assets and sectors that stand to benefit from a growth-oriented environment leading up to the midterm elections.
📣 Actions such as relentless calls for lower interest rates and talk of capping credit card interest rates, are seen as favoring cyclical assets that benefit from growth over defensive stocks.
🏦 While a potential cap on credit card interest rates could negatively impact banks and financial services, strategists believe the impact would be limited and that pullbacks in bank stocks would represent buying opportunities.
🧭 Furthermore, Tech investors are inquiring about how a potential U.S. takeover of Greenland would affect the viability of critical and rare earth minerals mining projects on the island.
⛏️ Critical Metals Corp, a company with a mining project in development in Greenland, has received questions from tech investors on this topic in the past week. The company’s CEO says the project is in the early stages of building a plant to extract heavy rare earth elements.
🤖 Tech investors are interested in how U.S. control of Greenland could impact the viability and development of critical and rare earth minerals projects there, which are seen as crucial for advanced technologies like EVs, AI, and defense applications.
📊 Market View.
📈 S&P 500 futures start the day on an optimistic note, once again trading above 7,000 points, marking a new all‑time high. Nasdaq 100 futures are also improving, currently trading around 25,915 points after briefly touching the 26,000 level in recent hours.
💵 The US dollar is strengthening again, with the DXY index resuming its upward momentum and approaching the 99 level. As a result, EUR/USD has fallen back sharply, sliding from near 1.17 to around 1.1660.
🇪🇺 Meanwhile, European markets are extending their upward trend. DAX 40 futures have reached new record highs above 25,550 points, while Euro Stoxx 50 futures are approaching the 6,050‑point mark.
🛢️ The oil market is also moving higher, with spot Brent crude trading around $64 per barrel.
🥇 Gold futures, which surged above $4,600 per ounce yesterday, are easing slightly in the latest session.
₿ Bitcoin continues to build upside pressure as it attempts to break the $92,300 barrier, currently trading around $91,830.
