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Rally Stalls After Wall Street Slip as DAX Tests 25,500 and Earnings Loom

Upcoming bank results alongside inflation data will test whether rate‑cut hopes justify record valuations.

Overview

  • Germany’s DAX briefly topped 25,500 before easing on profit‑taking, with European trading expected to start near flat after the Dow fell 0.8% and the S&P 500 and Nasdaq 100 slipped 0.2%.
  • U.S. consumer prices rose 2.7% year over year in December, slightly below forecasts, supporting prospects for more Fed rate cuts even as political pressure on the central bank persists.
  • JPMorgan opened earnings season with a profit drop tied to the Apple credit‑card takeover, sending its shares down about 4%, while Bank of America, Wells Fargo and Citigroup report next.
  • Brent crude holds near $63–64 a barrel on continued Iran tensions, and gold trades close to record highs as investors seek safety during the dispute over Fed independence.
  • Strategists flag overbought conditions in major indices, saying earnings pose a key test for the rally, even as Japan’s Nikkei notches fresh all‑time highs and China posts a record trade surplus.