U.S. stocks were mixed on Tuesday as investors digested a cooler-than-expected inflation report while the first wave of big bank earnings kicked off the fourth-quarter reporting season. The latest CPI data reinforced expectations that the Federal Reserve will keep interest rates on hold, even as corporate results begin to test lofty market valuations.
The Dow Jones Industrial Average slipped as financial stocks weighed on the index, while the S&P 500 hovered just below the flatline. The tech-heavy Nasdaq Composite edged higher early in the session before giving back some gains, reflecting a cautious tone as traders balanced easing price pressures against earnings uncertainty.
Market Movers:
- Cardinal Health (CAH) +3.4%: Shares rose after the company raised its fiscal 2026 earnings outlook and said specialty revenues are on track to exceed $50 billion, reinforcing confidence in its long-term growth strategy. Management highlighted continued momentum across pharmaceutical distribution and healthcare solutions.
- Option Care Health (OPCH) +8.8%: The stock jumped after the company issued stronger-than-expected fourth-quarter revenue and earnings guidance, signaling resilient demand for home infusion services. Investors welcomed the outlook as confirmation of steady growth heading into 2026.
- Revvity (RVTY) +8.6%: Shares advanced after the company said full-year adjusted earnings will come in above the high end of prior guidance. The update pointed to solid demand across diagnostics and life sciences tools.
- Travere Therapeutics (TVTX) -30%: The stock plunged after the company issued softer-than-expected sales guidance for the fourth quarter and full year. The sharp move reflected investor concerns over near-term revenue visibility despite a strong cash position.
- JPMorgan Chase (JPM) -2.5%: Shares fell after the bank reported quarterly results and issued 2026 guidance that, while solid, failed to excite investors following a strong run in financial stocks. Higher expenses and deal-related charges weighed on sentiment despite strength in trading and wealth management.
Inflation Data Reinforces Fed Pause Expectations
Tuesday’s Consumer Price Index report showed inflation pressures easing further at the end of 2025, with core prices rising less than forecast on both a monthly and annual basis. The data marked the lowest annual core inflation reading since early 2021, strengthening market conviction that the Fed will remain on hold at its upcoming policy meeting.
Bond yields edged lower following the release, while futures markets modestly increased the probability of a rate cut later in the year. Still, policymakers have signaled they want additional confirmation that inflation is sustainably moving toward the target before easing policy.
Earnings Season Takes Center Stage
JPMorgan’s results marked the unofficial start of earnings season, with Bank of America, Citigroup, and Morgan Stanley set to report later this week. Investors are watching closely to see whether strong trading activity and stabilizing credit conditions can offset margin pressure and slower loan growth. Outside of financials, guidance commentary will be key as companies outline expectations for demand, pricing power, and capital spending in a slowing but still resilient economy.
Looking Ahead
Investors are entering the heart of earnings season with inflation trends offering some relief but little room for complacency. With valuations elevated and policy uncertainty still in play, markets are likely to remain sensitive to corporate guidance and economic data in the weeks ahead. Whether stocks can extend recent gains will depend on earnings delivering reassurance that growth can hold up even as monetary policy stays restrictive.
