Dow Futures are experiencing a slight decline as traders prepare for significant economic data releases and the commencement of the quarterly corporate earnings season. The Trump administration encounters backlash regarding an inquiry into Federal Reserve Chair Jerome Powell, as oil prices increase amid escalating anti-government protests in Iran.

Dow Futures indicated a downward trend on Tuesday as investors prepared for the upcoming release of critical inflation data alongside a series of earnings reports from major banking institutions. By 03:05, the Dow futures contract experienced a decline of 46 points, representing a decrease of 0.1%, followed by a dip of 6 points, also 0.1%, and a further slide of 39 points, equating to 0.2%. The primary indices concluded the trading day with gains on Monday, recovering from earlier downward pressure associated with the ramifications of a criminal inquiry involving Powell and President Donald Trump’s suggested limit on credit card interest rates. However, equities ultimately found support from robust performance across various sectors, such as technology, consumer staples, and materials. “Overall, the narrative remains consistent with that of Friday, as bulls maintain control due to enhancing growth dynamics, robust earnings, indications of a significant improvement in productivity, and expectations surrounding stimulus,” analysts noted.

The Trump administration has encountered significant backlash regarding its decision to initiate a criminal investigation into Powell, attracting disapproval from former Federal Reserve leaders as well as some members of the president’s own Republican Party. According to sources, it has been reported that the investigation was initiated and authorized by Jeanine Pirro, the U.S. Attorney for Washington and a supporter of Trump, without the involvement of Attorney General Pam Bondi or Deputy Attorney General Todd Blanche being informed. In a social media post, Pirro asserted that the Justice Department opted to intervene with the Federal Reserve due to the central bank’s unwillingness to address an excess in expenditures associated with the renovation of its Washington headquarters. Pirro stated that her office “makes decisions based on the merits.” However, the action, which raised new worries regarding the autonomy of the Federal Reserve and resulted in an increase in U.S. Treasury bond rates, faced criticism from former Fed Chairs Janet Yellen, Ben Bernanke, and Alan Greenspan, who remarked, “[t]his is how monetary policy is made in emerging markets with weak institutions.” They cautioned about the “negative consequences” such actions might impose on inflation and the broader functioning of the economy. In the meantime, Republican Senator Thom Tillis, along with several of his colleagues, expressed criticism regarding the investigation. Tillis characterized it as a “huge mistake.”

As investors focus on the developments surrounding the Federal Reserve, attention shifts to the forthcoming release of the December U.S. consumer price index, a key indicator of inflation trends. Consumer prices in the world’s largest economy are projected to increase by 2.7% in the twelve months leading up to December, consistent with the rate observed in November. The month-on-month figure is anticipated to match November’s rate of 0.3%. Excluding more volatile components such as food and fuel, the “core” CPI is anticipated to see a slight increase to 2.7% from 2.6% year-on-year, and to 0.3% from 0.2% on a monthly basis. In a note, analysts indicated that they expect the core inflation figure to exceed expectations, contending that a prolonged U.S. government shutdown resulted in “more data collection occurr[ing] later in November, a period when Thanksgiving-related discounting is common.” In comparison to the entirety of November 2024, this timing probably influenced that inflation reading downward. Returning to more conventional collection timings in December suggests the potential for a more elevated reading,” analysts noted. Recently, Fed policymakers have placed greater emphasis on a decelerating jobs market rather than inflation as they implemented a series of interest rate reductions late last year. In principle, reducing interest rates can stimulate investment and employment, though it carries the potential risk of rekindling inflationary pressures. Evidence of persistent price increases may provide Federal Reserve officials with an additional consideration as they approach their forthcoming interest rate decision later this month. Reports indicate that the Fed is expected to maintain rates within the range of 3.50% to 3.75%.

Sentiment may also be influenced by a series of earnings reports from prominent banks this week, starting with the largest U.S. bank on Tuesday. On Wednesday, peers will report, followed by additional reports on Thursday. The inflation data, alongside the results from bank earnings, may significantly influence the sentiment in stock markets during the initial weeks of 2026. While the benchmark index has risen so far this year and posted a third straight year of double-digit growth in 2025, the outlook remains somewhat murky. While the Fed is expected to reduce rates once more this year, the trajectory for borrowing costs in the upcoming months remains somewhat ambiguous. Simultaneously, escalating geopolitical tensions have characterized the early days of January, notably due to the Trump administration’s maneuvers in Venezuela earlier this month and ensuing remarks regarding possible interventions in various countries and regions globally. Strong bank earnings may contribute to a positive assessment of Corporate America, potentially easing concerns among more anxious investors in the process.

Oil prices increased, marking a fourth consecutive session of gains as escalating anti-government protests in Iran have heightened worries regarding potential supply disruptions from this significant OPEC producer. Increased by 0.5% to $64.16 per barrel, while U.S. West Texas Intermediate crude futures advanced by 0.8% to $59.82 per barrel. The Brent contract achieved a seven-week peak in the prior session, whereas the WTI benchmark ascended to a one-month high.