Markets Week Ahead: Key Bank Earnings, Inflation Data Take Center Stage

Key Highlights:

• Banks kick off Q4 earnings this week with JPMorgan reporting Tuesday, while December CPI could prove pivotal for the Fed’s outlook. Equities have started 2026 on a solid footing despite ongoing geopolitical tensions.
• Fed Chair Jerome Powell said the central bank has received grand jury subpoenas from the Justice Department threatening criminal charges, marking a sharp escalation in the Trump administration’s confrontation with the Fed.
• Federal Housing Finance Agency Director Bill Pulte was a key driver of the subpoena push, sources said, while some Trump allies fear the move could roil bond markets and complicate Powell’s planned departure after his term ends.
• Gold jumped to a record high as the prospect of a criminal indictment against the Fed rekindled fears over its independence, while deadly protests in Iran lifted safe-haven demand amid mounting geopolitical and oil-market uncertainty. Gold approached $4,600 an ounce, and silver neared all-time highs as investors weighed political risks against the growth-versus-rates backdrop.
• Oil extended its biggest two-day rally since October as escalating protests in Iran — the most serious challenge to Ayatollah Khamenei since 2022 — raised risks to exports from OPEC’s fourth-largest producer, easing fears of a global supply glut and bearish sentiment.
• December’s jobs report showed modest payroll gains and a dip in unemployment to 4.4%, indicating employers are cautious about new hiring but largely avoiding widespread layoffs.
• As 2025 ended, US inflation likely picked up modestly but remained on a gradually easing path, with core CPI expected to rise 2.7% year-on-year in December and both headline and core prices seen up 0.3% on the month. With inflation signals still noisy and the labor market stabilizing, Fed officials are expected to keep interest rates on hold in the near term.
• US stocks climbed on Friday, led by tech, wrapping the first full trading week of 2026 with broad gains. The Dow and S&P 500 closed at record highs; the Dow rose more than 2% for the week, the Nasdaq gained just under 2%, and the S&P 500 added about 1.6%.

Stock futures extended losses after the Fed revealed it received grand jury subpoenas on Friday tied to Chair Jerome Powell’s June Senate testimony, with Dow and S&P 500 futures down 0.4% and Nasdaq futures off 0.7%. Earlier, futures had been only slightly lower as investors positioned for a busy week of bank earnings and December’s CPI report.

Markets are also contending with uncertainty over President Donald Trump’s interest in Greenland and other territories. German Foreign Minister Johann Wadephul traveled to Washington to meet Secretary of State Marco Rubi for talks on Greenland, which is part of fellow NATO member Denmark.

US Economic data and Earnings Calendar:

US inflation takes center stage on Tuesday after November’s surprise slowdown, which raised reliability concerns due to shutdown-related data disruptions. Markets will closely watch December headline and core CPI to judge whether disinflation is real or a statistical blip. Alongside PPI this week and PCE on 22 January, these data will be key inputs for the Fed’s 27–28 January rate decision.

US retail sales on Wednesday deserves close attention after October’s flat reading, which may have reflected pre–Black Friday caution. Any rebound in November could signal pent-up consumer demand finally showing up in the data.

Economic calendar:

Mon (Jan 12): No major reports

Tue (Jan 13): CPI, New Home Sales, Treasury Budget.

Wed (Jan 14): PPI, Current Account Balance, EIA Crude Oil, Existing Home Sales, MBA Mortgage Applications, New Home Sales, Retail Sales.

Thu (Jan 15): Initial & Continuing Claims, EIA Natural Gas Inventories, Empire State Manufacturing, Export & Import Prices, Net Long-Term TIC Flows, Philadelphia Fed Index.

Fri (Jan 16): Capacity Utilization, Industrial Production, NAHB Housing Market Index.

Earnings season begins this week with major banks under pressure to impress, as many financial stocks hover near record highs. JPMorgan Chase (NYSE:JPM) reports Tuesday, followed by Bank of America (NYSE:BAC), Citigroup (NYSE:C), and Wells Fargo (NYSE:WFC) on Wednesday. Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS) release results Thursday, with PNC Financial Services Group (NYSE:PNC) closing out the week on Friday.

On Monday, the 44th annual J.P. Morgan Healthcare Conference is underway in San Francisco and runs through Thursday.

Earnings calendar:

Mon (Jan 12): Sify Technologies (NASDAQ:SIFY), Sono-Tek (NASDAQ:SOTK), Wealthfront (NASDAQ:WLTH).

Tue (Jan 13): Bank of New York Mellon (NYSE:BK), Concentrix (CNXC), Delta Air Lines (NYSE:DAL), JPMorgan, Phoenix Education Partners (PXED)

Wed (Jan 14): Bank of America, Bitmine Immersion Technologies (BMNR), Citigroup, H.B. Fuller (FUL), Home BancShares (HOMB), Infosys (INFY), Wells Fargo (WFC)

Thu (Jan 15): BlackRock (NYSE:BLK), First Horizon (FHN), Goldman Sachs (NYSE:GS), J.B. Hunt Transport Services (JBHT), Morgan Stanley (NYSE:MS)

Fri (Jan 16): M&T Bank (MTB), PNC Financial Services (PNC), State Street (NYSE:STT), Regions Financial (RF), Wipro (WIT)

Technical Analysis:

DJIA Index

• The DJIA remains in an uptrend channel that began at the August 2025 lows.
• A close above the channel midpoint signals scope for further gains toward the 50,000 area this week.
• The midpoint stands near 49,140, while the upper boundary around 50,200 is a key resistance zone.
• The index is expected to trade within the 49,140–50,200 range.

DJIA Daily Candlestick Chart

Nasdaq 100 Index

• The NDX continues to face resistance in the 25,870–25,900 area.
• As long as this cap holds, trading is likely to remain range-bound between 25,900 and 25,340, with additional support near 24,650.
• A clear break below 25,340 would increase downside risk toward 24,650.
• Conversely, a strong and sustained move above 25,900 would open the way toward 26,200 and beyond.

NDX Daily Candlestick Chart

SPX Index

• The SPX broke above the 6,900-resistance last week, turning it into a key support base for further gains.
• The index shows signs of strength.
• A pullback to retest 6,910–6,890 is likely before the next leg higher.
• A failure to hold 6,890 would lead to a deeper downside correction.

SPX Daily Candlestick Chart

Weekly US Indices Probability Map:

• The US weekly market probability map for Jan 5–9, 2026, suggests a historically bullish start and finish to the week, with more mixed trading in the middle.
• These probability maps are derived from historical seasonality patterns.
• The sentiment readings are driven by a seasonality-based scoring system.

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Ali Merchant is a seasoned financial market professional with expertise in Technical Analysis, Treasury & Capital Markets, Trading, Sales, Research, Training, Fund & Relationship Management, Fintech, and Digitalization. He is a CMT charter holder and an active member of the CMT Association, USA, the American Association of Professional Technical Analysts, and the CMT Association of Canada. He has worked on various roles and organizations in North America and the GCC, such as ABN Amro Bank, Thomson Reuters, Refinitiv, MAK Allen & Day Capital Partners, and Bridge Information Systems.

He is the founder of TwT Learnings, which provides financial market training.

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