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Briefing.com Summary:
*Stocks are indicated to open weaker, with threats to the Fed's independence cited as a key theme for the weakness.
*The stock market has had a hot start to the year, but buyers are backing off for the time being, with participants seeing a lot of excuses to take some money off the table.
*There is a $58 billion 3-yr note auction and a $39 billion 10-yr note auction today.
"State intervention"..."attack on Fed independence"..."geopolitical tumult"..."sell America"..."risk off"... These are the operative catchphrases that are reportedly weighing on investor sentiment this morning.
Currently, the S&P 500 futures are down 39 points and are trading 0.6% below fair value, the Nasdaq 100 futures are down 200 points and are trading 0.8% below fair value, and the Dow Jones Industrial Average futures are down 319 points and are trading 0.6% below fair value.
Let's see if we can shed some light on the basis for why these terms are part of the pre-open narrative.
- State intervention
- President Trump is calling for a 10% interest rate cap on credit cards for one year.
- President Trump has said institutional investors should be barred from buying single-family homes.
- President Trump signed an executive order that prevents defense companies from buying back their stock or paying dividends until their production process improves.
- The U.S. government has taken equity stakes in certain publicly traded companies.
- Attack on Fed independence
- The Department of Justice served the Fed with grand jury subpoenas and threatened Fed Chair Powell with a criminal indictment.
- Strikingly, Fed Chair Powell recorded a video response to the DOJ's accusations, calling them politically motivated.
- Geopolitical tumult
- Nicolás Maduro was removed from office in Venezuela, and the U.S. has intervened to steer Venezuelan policy.
- Anti-government protests are raging in Iran, and the U.S. is seriously considering a strike on Iran, according to The New York Times.
- The Trump administration continues to assert that ownership of Greenland is a strategic priority.
- Sell America
- Stocks are indicated lower; longer-dated Treasuries are weak; and the dollar is down against other major currencies (U.S. Dollar Index -0.4% to 98.72)
- Risk Off
- The go-to assertion when the stock market is under broad-based selling pressure.
- Hard assets are on the move, with gold futures up 2.8% to $4,625.30/toz; silver futures up 7.4% to $85.24/toz; and copper futures up 2.5% to $6.05/lb.
These catchphrases all have a decidedly negative orientation, yet the equity futures market isn't all that weak relative to the news flow. That understanding suggests market participants may be using this compendium of news as an excuse to take some profits following a hot start to 2026 that has featured a 5.7% gain for the Russell 2000, a 4.7% gain for the S&P MidCap 400, and a 3.2% gain for the equal-weighted S&P 500 versus a 1.8% gain for the market cap-weighted S&P 500.
Still, there is a lot of background noise, so to speak, to temper buying interest for the time being as the fourth quarter reporting period is set to get underway this week, accompanied by an economic calendar that includes the December CPI, PPI, Existing Home Sales, and Retail Sales reports, and a possible ruling on Wednesday from the Supreme Court on the IEEPA matter.
Today won't include any economic data of note, but there will be two Treasury auctions. There is a $58 billion 3-yr note auction at 11:30 a.m. ET and a $39 billion 10-yr note auction at 1:00 p.m. ET. The 2-yr note yield is unchanged at 3.54%, and the 10-yr note yield, still running into resistance at 4.20%, is up two basis points to 4.19% ahead of those auctions.
