U.S. Stocks Slide Amid Financial Worries Over Trump's Credit-Card Cap

U.S. stocks declined as financial shares dropped, led by Trump’s proposal for a 10% cap on credit-card rates, raising concerns about financial companies' profits. JPMorgan executives cautioned about potential consumer impact. Despite expectations of interest rate cuts, major indexes fell, marking a challenging day for the financial sector.

U.S. stocks took a hit on Tuesday, driven primarily by a slump in financial shares. The downturn came in the wake of remarks from JPMorgan executives and recent news of President Donald Trump's proposal to cap credit-card interest rates at 10%.

This proposal has stirred unease within the financial sector, as executives, including JPMorgan CEO Jamie Dimon, have warned that the cap could negatively impact both profits and consumers. Though a report released earlier indicated U.S. inflation in December met expectations—bolstering predictions for Federal Reserve interest rate cuts—these developments weren't enough to prevent the selloff.

Shares of financial giants like Visa and Mastercard plummeted significantly, contributing to a decline in the S&P 500. Despite a better-than-anticipated quarterly profit, even JPMorgan's stock dropped amidst declining investment banking fees. The Dow, Nasdaq, and S&P all registered losses for the day, setting the stage for a tough earnings season ahead.

(With inputs from agencies.)